HND个人理财参考答案

1.Credit card

Advantage 3

Power and Ease of Purchase - Credit cards can make it easier to buy things. If you don't like to carry large amounts of cash with you or if a company doesn't accept cash purchases putting purchases on a credit card can make buying things easier.

of Purchases - Credit cards may also offer you additional protection if something you have bought is lost, damaged, or stolen.

a Credit Line - Having a good credit history is often important, not only when applying for credit cards, but also when applying for

things such as loans, rental applications, or even some jobs. Disadvantage 3

Your Budget -- The biggest disadvantage of credit cards is that they encourage people to spend money that they don't have. Most credit cards do not require you to pay off your balance each month, so even if you only have ￡100, you may be able to spend up to ￡500 or

￡1,000 on your credit card.

Interest Rates and Increased Debt -- Credit card companies charge you an enormous amount of interest on each balance that you don't pay off at the end of each month. This is how they make their money and this is how most people in the United States get into debt.

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Card Fraud - Like cash, sometimes credit cards can be stolen. They may be physically stolen or someone may steal your credit card number and use your card to rack up debts.

How to avoid to pay interest on purchase

the outstanding balance in full by the due date which statement every month.

up a direct debit to clear outstanding balance each month automatically.

2.Non- cash payment

Contactless payment

Contactless is a fast, easy and secure way to pay. The purchaser taps the card reader with their card, waits for a beep and green light and the transaction is completed. From September 2015, the contactless card payment limit is being increased from ￡20 to ￡30. Beyond the limit, the customer has to use the chip and pin function to authorize the transaction using their PIN number.

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Advantages:

1. Convenience. Tapping to pay is faster and more convenient than most other forms of payment. A contactless card, for instance, can be used without removing it from your wallet.

2. Acceptance. Contactless cards

are accepted at far fewer locations or retailers than other payment methods.

Disadvantages:

1. Less implicit. If you have multiple cards in your wallet and you pay without removing them, the winner is random luck. Sometimes, this can cause real issues (such as errors at transit settings).

2. Less secure than chip-and-pin

3.ISA

Definition: The individual Saving Account is an account where interest and gains made on capital is not taxed at source.

Features: 1. available to savers aged 16 or over. 2. ISAs are available to UK residents. 3. ISA was designed to encourage saver to invest in a wide range of saving or investments. 4. With stock and shares in a ISA, dividends are free if tax. Any capital gains on the stocks and shares are also tax fee. 5. The maximum you can save in ISAs is ￡20,000 (6 April 2018-5 April 2019) tax fee. 6. ISA can be saving accounts, share accounts or a combination of the two.

There are four components within ISA.

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1. Cash ISA

2. Stocks and shares ISA

3. Innovative finance ISA

4. Lifetime ISA

How to saving

You can save up to ￡20000 in one type of account or split the allowance across some or all of the other types.

You can only pay ￡4000 into your lifetime ISA in a tax free.

4.Personal loans in the UK

1. Loan terms can usually be 1 year to 8 years (or 5 years), and the exact term depends on the amount borrowed.

2. Personal loans are always unsecured.

3. Interest on the loan is charged at a fixed rate for the full term.

4. Personal loans usually available for sums of ￡1,000 to ￡50,000 (or ￡25,000), the maximum amount depends on financial institutions’ decisions and customer’ individual circumstances.

5. Personal loan is created by transferring funds into the customer’s current account.

Overdraft features

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1. An overdraft allows you to borrow a limited amount of money that banks have approved for you through your current account, and you can issue cheques to make payments up to that limit.

2. Banks will only charge you interest and fee if you actually use it. The charge based on the total amount of overdraft on daily basis.

3. Lower interest rates will be charged compare with the borrowing from credit card since the total amount of borrowed may decrease if your salary is paid to

your current regularly.

5.Mortgage

Equity release mortgage

Equity release mortgage is the process of paying off one mortgage with proceeds from another mortgage using the same property as security. Advantage 3

1. The release pf equity that can be used for renovation work or expanding you home.

2. No restrictions on renting the property out if there is no mortgage. #

3. The process for application is very quick since this is not the first time application.

Disadvantage 2

1. It maximum loan is up to ￡25,000.

2. You may be switching your short term debts to long term debts.

1.Redundancy insurance policy

Redundancy insurance, also referred to as unemployment protection insurance. It allows you to cover 50%-70% of your GROSS salary up to a maximum of ￡5000 per month Tax Free.

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Features: 1. Benefits are payable monthly usually after 30 days unemployment. 2. Payable until a return to work or the ceasing date.

3. Can be in sole, joint cover or 2 separate names.

4. Often linked accident or sickness insurance plans - although can be taken as separate benefits.

ASU

You can choose linked ASU. It is designed to provide you with financial protection in the event you are unable to continue working because: 1. You have lost you job through on fault of you own. 2. You become ill and are too sick to work. 3. You are injured and unable to work

2.Factors

When they choose insurance, they can consider

1. benefits/level of cover

2. premiums payable

3. Conditions and exclusion to the cover

4. Do the premiums change

5. Insurance performance

6. One off charges

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1.Dividend rights

1. no fixed rate of dividend.

2. Dividend is paid after dividend at a fixed rate is paid on preference shares.

3. At the time of liquidation,

capital on equity is paid after preference shares have been paid back in full. 4. These shares are most important part of a company’s capital. 5. They carry the risk of the company’s failure.

Companies sometimes closing the door and going out of business. Then, company pays its creditors first. Preference shareholders receive their share of the company’s assets based on the value of the shares they own. After that, any value remaining is dividend among the ordinary shareholders.

2.Difference between unit trust and investment trust

1. Unit trust are open-ended schemes of investment, which means there is no limits to the number of units can be created. Investment trusts are closed-ended: an investment trust has a fixed number of shares.

2. Unit trust is managed by a fund manager, who maintains the trust and tries to improve profit level, a separate organisation acts as trustee. The managers and the trustees undertake contractual obligations that are set out in the terms of the deed. Every investment trust has an independent board of directors. They are responsible for safeguarding shareholder interests. So, the managers and directors who exercise control investment unit can be the same person.

3. Unit Trusts can advertise to invite the public to buy units at any time. Investment Trusts are not allowed to advertise except for new issues.

4. Investment trusts do better than unit trusts over the long term, because many investment trusts use gearing.

5. Broadly speaking, an annual management charge for the Unit Trust can be up to % of the value of your funds. Broadly speaking, annual fee for investment trust vary from per cent to 1 per cent of funds under management

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2.The Data Protection Act 1998

Information can be transferred to third parties in the following circumstances:

1. To persons acting as the bank’s agents under a strict code of confidentially.

2. Suspicion of commission of terrorist financing offence or for purposes of identifying terrorist property.

3. With the account holder’s express agreement to name third party.

4. As required by law or regulation.

5. As required in relation to Money Laundering legislation.

6. To credit reference and fraud prevention agencies and other organisations.

Paym

Paym enables you to send or receive money up to a daily limit set by bank using just a mobile phone. Before you start using mobile payments, you will need to register for paym and link your UK mobile phone number with you own bank account since paym only works between people who are registered for his service with their bankers. Paym usually pay back friends and family without having to withdraw cash. You don’t need to share bank detail. You can exchange payments with other paym user, no matter who they bank with. It’s free, secure and easy to use and payments are sent in a matter of seconds. However, there are some disadvantages, you can’t send a payment to someone whose mobile number is not registered for paym. There is no way of stopping the payment once you select confirm.

Debit card

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Debit cards are not a way to borrow money and you have to make sure that there are sufficient funds in your account to cover the payment. You can insert the debit card into the special card reader in the shop, and using the unique Chip and Pin to authorize the transaction instead sighing a receipt. Debit cards allow for payment to be debited by a shop or a company directly from your current account electronically. Debit cards are used with card readers in shops that contact your bank electronically to confirm the transaction. They can also be used to pay for things via the internet or telephone. It’s easy to obtain and convenience. However, it has no grace period and less protection.

Credit card

Credit cards are a major source of short term borrowing. A card holder is given limit by the issuer based on their assessment of the credit worthiness of the card holder. If the account balance is paid in full, the card holder has enjoyed an extended period pf interest free credit. If the card holder does not pay their balance in full they must make a minimum repayment determined by the card issuing company. When the card holder does not pay their balance in full, interest is charged daily on the outstanding balances.

ISA

Individual saving accounts are a government scheme to encourage more people to save or invest their money without paying any tax on the interest earned nor on income and any capital gains from investment in an ISA.

The ISA allowance may change every year, so you should seek to maximize the year’s ISA allowance. In that way, you can reduce or eliminate

the tax liability in relation to your savings and investments. You can’t hold an ISA with or on behalf of someone else.