Business Studies

Credit cards and debit cards explained with their advantages

len Alfred Ajibola - Sun, 16th June, 2019 @ 4:10 PM

Topics in Business Studies

Advantages and Disadvantages of Corporations Advantages and Disadvantages of Limited Liability Company Advantages and Disadvantages of Partnership Credit card and Debit card explained with their similarities and differences Business Structure: What is a business structure? Advantages and Disadvantages of Franchise What is a franchise? Types of franchise Corporation explained with its types What is Limited Liability Company? What is Partnership Business? Types of Partnership What is business studies? Concept of business Elements of Management What is Management? Importance of Management Advantages and Disadvantages of Air Transport Advantages and Disadvantages of Rail Transport Cheque explained with its terminologies Cheque: Types of Cheque Cheque: Characteristics of Cheque Advantages and Disadvantages of Cheque What is Advertising? Types of Advertising


Academic Questions in Business Studies

Please check out our Test Your Knowledge page to see all Questions and Answers

An accounting system focused primarily on a balanced debit and credit side is termed _____.

  • A. Ledger system

  • B. Journal system

  • C. Double entry system

  • D. Balance sheet system

  • E. Principle of accounting system

  • F. Balanced accounting system

With regards to money, which of the following statement is incorrect?

  • A. Money is crucial for the survival of every human being

  • B. Money is completely advantageous

  • C. Money is defined as anything that is generally accepted as a medium of exchange

  • D. Monopoly is said to exist when money and wealth exists in the hands of a few

  • E. Excess money in an economy can lead to inflation

  • F. When a person receives money that isn't commensurate with the job he or she had done, then that's underemployment

Which of the following statement is wrong with regards to business?

  • A. Business involves the exchange of something for another thing or money

  • B. Business is an economic activity

  • C. In business, profit goes beyond money

  • D. Businesses do not have social responsibilities to their customers

  • E. The exchange of services is an aspect of business

  • F. Businesses can be affected by government policies

Consumer _____ are the laws and methods put in place by various agencies so that consumers can enjoy maximum satisfaction on the goods they buy and services rendered to them.

  • A. Protection
  • B. Policy
  • C. Rights
  • D. Defence
  • E. Guide
  • F. Safety

Which of the following is not a characteristics of business?

  • A. The buyer and seller must always come into a contract agreement

  • B. Risk from unforseen circumstances is involved

  • C. They are subject to policies made by the government

  • D. All business transaction is aimed at making profit

  • E. It requires a discontinuous transaction between the buyer and the seller

  • F. Investments are required to begin a business

Which of the following is not a Right of Consumer Protection?

  • A. Right to Education
  • B. Right to Choose
  • C. Right to Safety
  • D. Right to the Good things of Life
  • E. Right to be Assured
  • F. Right to Compel

Which of the following is NOT a government agency of consumer protection?

  • A. Ministry of Sports
  • B. Ministry of Commerce
  • C. Consumer Protection Council
  • D. Ministry of Health
  • E. Ministry of Environment
  • F. National Drug Law Enforcement Agent

Define Consumer Protection.

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What are credit and debit cards?

In this article, we will look at credit cards and debit cards as methods of making payments through commercial banks. Meanwhile, recall that other methods of making payment through commercial banks include bank notes and coins, cheques, traveller's cheque and bank drafts.

Please read on bank notes and coins as methods of payment here.

Although the debit and credit cards may appear similar in identity, regardless, both card have got different functionalities.


As the name implies, a credit card is defined as a card allows the holder to purchase goods or services online and on credit, with the payment immediately made by a third party on the holder's behalf. The third party involved in such transaction is the card holder's financial institution.


In simple terms, when one uses a credit card for purchases, it will imply that they are buying on credit; and the issuer of the credit card (which happens to be their bank) will pay on their behalf. Through this credit lending activity of the credit card holder's bank, it is the responsibility of the card holder to refund or pay back the money to their bank. To this end, the bank sends a bill of the amount paid to the credit card holder via an email, SMS or another means.

You can read on deferred payments here.


From the above explanations so far, it is worthy of note to state that the credit card holder may pay back with interest.

The interest structure may vary or can even become non-applicable in some cases. For instance, if the credit card holder pays back within a month, interest may not be charged but when payments are delayed, interest will be charged accordingly.


Below is an image of a credit card:

Credit Card - Len Academy

Please read the similarities and differences between credit and debit cards here.

 

A debit card is a card that allows the holder to purchase goods and services online or through a computer, with an immediate debit on their bank account.

The term 'debit' means that money is deducted from the owner's account immediately after the purchase or transaction had been made.

The issuer of the debit card (commercial bank or financial institution) may charge some fee whenever the card is utilized in making payments.


Below is an image of a debit card:

Debit Card - Len Academy


The debit card has become very popular because it is used in Automated Teller Machines (ATMs) and Point of Sales (PoS). The debit card is also used in the purchase of goods and services online, transfer of funds, internet banking and so on.

Please read on bank wire and wire transfer here.

 

For security reasons, we must always protect the 16 digits written in the format: 'XXXX XXXX XXXX XXXX' as seen in the front of both cards.

At the back of both cards is a 3 digit number called 'card verification code' (CVC). The CVC must also be protected.


Credit and Debit cards can be used to pay for goods and services online through web applications that utilizes them. This implies that you can purchase a product from Amazon, Jumia or Konga online and pay with your debit card. Meanwhile, you can also support Len Academy's free educational vision through your debit or credit card here. One can also pay for professional examination online via the use of a debit card.


For those who run adverts on various websites, they can pay for these adverts via their debit card also. In fact, the use of credit and debit cards is one of the ways through which a cashless economy is fostered.

Please read on marketing here.

 

Advantages of debit and credit cards

  1. The seller will make more sales whenever they accept both credit and debit cards alongside cash.
  2. The seller is guaranteed of payment from a variety of buyers.
  3. The owner of a credit or debit card has a better financial security since they don’t go around carrying cash.
  4. The debit card offer additional security through password pins while the credit card uses the holder's signature for additional security.
  5. The seller's business is promoted since payment is acceptable from any part of the world.
  6. The buyer enjoys the luxury of paying from the comfort of their homes and offices with minimal risk.
  7. The use of debit and credit cards promote a cashless economy.

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len

Alfred Ajibola is a Medical Biochemist, a passionate Academician with over 10 years of experience, a Versatile Writer, a Web Developer, a Cisco Certified Network Associate and a Cisco CyberOps Associate.


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Amazing facts in Business Studies

The world's 100 richest people earned enough money in 2012 to end global poverty four times over


NOTABLE POINTS IN Business Studies

Consumer protection refers to the ways or methods through which consumers enjoy maximum satisfaction from the goods they buy and services rendered to them.

The agencies of consumer protection assists in protecting the consumer rights. These agencies may also be referred to as the organs of consumer protection. Basically, we have three of them, they are:

  1. Government Agencies

  2. Independent Agencies

  3. Legislation

Please read on consumer protection here

One of the responsibilities of the government of every nation is to set up agencies or organizations that will protect the interest of the consumers and invariably, the people.

Below are some of the government agencies of consumer protection:

  • National Drug Law Enforcement Agency (NDLEA)
  • National Agency for Food, Drug Administration and Control (NAFDAC)
  • Consumer Protection Council (CPC)
  • Rent Tribunal
  • Ministry of Health
  • Ministry of Commerce
  • Ministry of Transportation
  • Ministry of Environment
  • National Wages and Salaries Commission

Please read on the government agencies of consumer protection here