1. Unit 8: Assignment 1 – Task
Credit & Debit cards
Unit 8: Assignment 1 – Task

2. intro
Credit and debit cards are huge parts of buying online due to normal cheques being phased out of internet practice
As such its important to know whether this method is worth using at all
As such we have researched credit and debit cards in depth and have prepared this personation to show what we found

3. Comparison of data types
pro’s/con’s
Different
Payment methods
Pro’s
Con’s
Electronic cheque
The efficiency over actual credit cards it immense
There are huge security concern’s
PayPal
Much quicker then every other type of payment
Some sites don’t support PayPal usage
Credit/Debit card
Good level of protection
Once the cards data is used there is a chance of it
nochex
The ability to send and receive money over the internet
Charges people without telling them, doesn't protect them and losses there money
Each of the available methods have positives and negatives that have been taken into consideration
Electronic cheque: while they are more efficient then a normal credit card and enables payment to be made a lot quicker there are a lot of concerns about how safe the payment method is for the user and whether it can really be trusted
PayPal: the quickest and all around considered the best possible form of payment available on the internet due to its safety and speedy nature but even though it’s the best payment method some sights do not support this payment method but this is normally a sign that the sight is ether not above board or is just severely new
Credit/Debit card: this is one of the most used form of payment in real life and in the virtual scape as such there are tones of protection built around but as such there are an equal amounts of ways to scam credit and debt cards
Nochex: the abilaty to send money over the internet is a usefull abilaty but the company that did it carged hidden costs, acidentaly stole money and

4. Credit cards

5. Disadvantages of Credit cards
It is easy to go into large debt with a credit card.
There are some hidden costs.
Withdrawing money costs you money.
Credit card fraud.
Debt: Credit cards are a form of borrowing; there are risks when using a credit card. One such risk is that you can easily fall into large debt with the card if you use the card way too much. If you do not pay off the balance each month you will be charged interest for each month you miss and you can get into very deep debt this way.
Hidden costs: If you miss your monthly payment, you will be charged interest on the original borrow, whether you go slightly over a month or don’t pay at all. If you go over your credit limit, you will also be charged for this.
Withdrawals cost money: You are charged a “small” fee when you withdraw your money from a credit card using an ATM, this charge is typically around 2%.
Credit card fraud: It is possible that your credit card will be stolen or the actual number be stolen too. Thankfully though you will not be responsible for the cost of the goods that the thief purchases if you report the theft to your credit card provider, instead you will be charged a small amount such as £30 or even nothing.

6. Advantages of credit cards
The protection given to credit cards is much higher the that of debit cards although there use is much more complicated then a debit card
There is more freedom with credit cards
With a debit card the money you spend is your actual money going straight to the seller while this is a more direct way of buying things if it’s a scam it makes it hard to fix
When using a credit card you spend credit equal to the money in your account an at the end of the month the bank takes the amount of money that you have spent away from the money in your account
This also mean you can a sort of temporary loan from the bank when you have a good credit score (how quickly you pay back any loans you take out from them) you are able to use a overdraft which enables you to spend more money than what you have under the understanding you can pay it back before the end of the month

7. Explanation of a credit card
A credit card gives the user the ability to make purchases for something without actually spending any money at the time of purchase, instead you will be charged monthly.
An example of how the credit card works:
£1000 TV
2.5% Interest
Month one:
Cost: £1025
£1000 TV
Full month one payment missed (£25)
2.5% Interest
Month Two:
Cost: £
An example of how the credit card works:
You purchase a new TV for £1000 with the Annual Percentage Rate for your card being at 30% (2.5% per month.)
You now have to pay £25 interest for the first month. So this means you have to pay off the original £1000 and the £25.
However; If you had only paid off £20 of the £25 interest, you will still owe the original £ the missing £5 the next month WITH the 2.5% interest still applied.
So the second month’s payment would be the £1005 plus the 2.5% interest (£25.13)
If you continue not paying on the correct date, the interest will only continue to build up. OR
£1000 TV
Part of month one payment missed (say £5)
2.5% Interest
Month Two:
Cost: £

8. Debit cards

9. Disadvantages of Debit cards
With credit cards, you are often offered warranties. With debit cards this is not the case.
A debit card could easily be lost, they are only small plastic cards.
It is possible that you the debit card company will charge you if you take out too many withdrawals from an ATM per month.
You can also be charged for purchasing too many products with the card within a month.

10. Advantages of debit cards
with this card you can only use the money you have as such its impossible to accidentally go into debt while using a debit card
You never get any hidden costs
With a debit card the money you spend is your actual money going straight to the seller while this is a more direct way of buying things if it’s a scam it makes it hard to fix
As such credit cards have an advantage over debit cards due to being more safe

11. Explanation of a debit card
A debit card works differently to a credit card, instead of having to pay for a product using credit, the money is taken from your bank account as soon as you purchase the product.
Example of how a debit card works:
£1000 TV
No interest
Day of purchase:
Cost: £1000