Money Concepts: Methods of Payment

Cash 

 
Pros  Cons 
- Can be inconvenient or bulky to carry  - Usually accepted almost everywhere 
- No rewards (e.g. you can’t get rewards  (some stores ONLY accept this method 
that credit cards will give to you)  because they have to pay a transaction 
- You might get a discount (since stores  fee for credit/debit cards) 
don’t have to pay the transaction fee) 
- Good for emergencies (e.g. if power is 
out, you can’t use credit card machine) 
- Buyer has a sense of ownership (you 
know exactly how much you are paying 
and when you are paying) 

 
 
 
 
 
 
 
 
Money Concepts: Methods of Payment
Cheque  
Pros   Cons 

- Easy to send (light to ship in mail, or  - May expire with time (or may decrease in 
even email)  value over time) 
 

Credit Card 
 
Pros  Cons 
- Keeps you in budget since the money  - Late payment charges: if you are late, 
comes out directly from your bank  you have to pay interest, late fees AND 
account  the amount borrowed 
- Build credit history: every time you make  - Not accepted everywhere OR there may 
a purchase and pay it back in time, this  be an extra fee to use (especially for 
goes into a score. This score can be used  small purchases) 
for taking out loans or renting an  - You have time to pay back the money 
apartment  *BUT you eventually have to pay it back! 
- Easy to get: you receive one when you 
open a bank account 
Money Concepts: Methods of Payment
 
 
 
 
Debit Card 
   
- Can be stopped or returned (e.g. if the  - You often forget how much is left on it! 
buyer does not have the funds in their  This means you don’t use it, or need to 
account, it “bounces” and the seller  pay extra if you choose an item worth 
doesn’t get paid)  more than what is on the card. 
- Easy to get: you receive one when you  - Added expense on the seller side: need 
open a bank account  to invest in security 
- Convenience (e.g. don’t need to carry 
cash) 

E-transfer 
   
- Speed and convenience: you can buy   
anywhere at any time on the internet 
Money Concepts: Methods of Payment
 
Gift Card 
 
Pros  Cons 
   

Usually accepted almost everywhere (some  Keeps you in budget since the money comes out 
stores ONLY accept this method because they  directly from your bank account  
have to pay a transaction fee for credit/debit 
cards)

● Funds leave the account later (e.g. if you  May offer incentives such as: 
are the issuer, it takes time for the  ● Cash back (e.g. you get X% of your 
seller to process it  purchase back in cash!) 
● Reward points (i.e. Airplane points)

Fraud You have time to pay back the money *BUT you 
eventually have to pay it back!

Speed and convenience: you can buy anywhere  Security: still vulnerable to hacking 
at any time on the internet
Money Concepts: Methods of Payment
You might get a discount (since stores don’t  May expire with time (or may decrease in value 
have to pay the transaction fee) over time) 

More sales for sellers: buying online is  Buyer has a sense of ownership (you know 
increasing  exactly how much you are paying and when you 
are paying)

Build credit history: every time you make a  Late payment charges: if you are late, you have 
purchase and pay it back in time, this goes into  to pay interest, late fees AND the amount 
a score. This score can be used for taking out  borrowed.
loans or renting an apartment.  

Good for emergencies (e.g. if power is out, you  Can be stopped or returned (e.g. if the buyer 
can’t use credit card machine) does not have the funds in their account, it 
“bounces” and the seller doesn’t get paid)

Fraud Can be inconvenient or bulky to carry

Not accepted everywhere OR there may be an  Temptation to overspend: costly if you don’t 
extra fee to use (especially for small  keep track of your purchases and pay on time 
purchases)

Retailer can go out of business before it is used Easy to get: you receive one when you open a 
bank account 

No rewards (e.g. you can’t get rewards that  Added expense on the seller side: need to 
credit cards will give to you) invest in security 

Convenient gift: the receiver won’t return or  Easy to send (light to ship in mail, or even 
exchange  email) 

Can be lost or destroyed and not replaced Convenience (e.g. don’t need to carry cash) 

No reward points You often forget how much is left on it! This  
Money Concepts: Methods of Payment
means you don’t use it, or need to pay extra if 
you choose an item worth more than what is 
on the card. 

Doesn’t help your credit score May not be accepted at all stores in certain 
situations (i.e. when communities are taking 
steps to reduce physical contact) 

 
1. Therèse and her sister are looking through a garage sale. They see a bike they both like for $9. Which
method of payment should they use? Why?

2. You are always on top of your bills and just got a raise at work. You decide to buy a laptop. What
method of payment should you use? Why?

3. You are shopping online one evening and decide to purchase a locally made set of pottery. Which
method of payment should you use? Why?

4. Your Great Aunt Sally is sending you birthday money in the mail. Which method of payment should she
use? Why?

5. You are purchasing an expensive new couch. Which method of payment should you use? Why?