Cheques, credit cards, debit cards, overdrafts, standing orders, what do they all mean?

• Cheques
• Cards


• Banking services

Why would a cheque not be paid?
Sometimes cheques are not paid. This could happen because:

• The person who wrote it didn't have enough money in their account.
• They didn't fill it out properly. For example, there's no date on it or the amount written in figures is different from the amount written in words.
• The cheque is post-dated. That means the date on the cheque is some time in the future and you have tried to pay it into your account before then.
• The person who wrote the cheque has stopped it.
• The person who wrote the cheque may have money problems so the account has been frozen or closed.

For more information on when a cheque may or may not be paid, please speak to your current account provider.

How to stop a cheque
Speak to your bank as soon as possible to find out what you have to do. Normally, you can't stop a cheque that has your cheque guarantee card number on the back of it and if the amount is under your cheque card limit. If the cheque has already been paid, you can't stop it.

Cards
There are lots of cards around- here's what they all do.

What is a cheque guarantee card?
If you're paying for things with a cheque, you'll probably be asked for a cheque guarantee card. This means the bank will normally pay your cheque up to the amount guaranteed - you'll find this amount printed on your card.

What is a cash card?
This lets you take out money from a cash machine. To use it, you'll need a Personal Identification Number (or PIN) which your bank sends you. Each time you use your card at a cash machine, you'll need to key in this number, but make sure you never write it down.

What is a debit card?
You can use a debit card to buy goods and services. A debit card is very much like a cheque, unlike a credit card, you pay for goods straight away and the money comes out of your account quickly. Most debit cards have a SWITCH/DELTA/SOLO/ELECTRON symbol on them.

What is a combined cheque guarantee/debit card/cash card?
You can use this card for two things: to guarantee the payment of cheques, and to pay for goods and services. It normally has a SWITCH/DELTA/SOLO/ELECTRON symbol on it if it's a debit card. You can often get money from cash machines with this card, by keying in a Personal Identification Number (or PIN).

What's a credit card?
A credit card lets you buy goods and services up to a set limit before you pay for them. You usually have up to 56 days to pay your bill. If you clear your balance in full each month, you don't pay any interest on the money you have spent. But, if you don't, you'll normally have to pay at least 3-5% of the balance, and interest will be charged on the outstanding balance. Some cards charge you an annual fee.

What is a cash machine?
These can be called different names, but they all do the same job, they let you get cash out at any time. All you need is your cash card and your Personal Identification Number (or PIN).

If the cash machine has the same symbol on it as on your card, like CIRRUS/MAESTRO/LINK, you should be able to use it.

If you use a cash machine in the UK, which has a LINK symbol on it, you don't normally get charged, if you have money in your account. If there is a charge you'll be told before you take the money out.

But beware of cash machines which are in unfamiliar places, as you'll pay a fee of around £1.25-£1.50 each time you use them. Again you'll be told upfront so you can cancel the cash withdrawal.

You can also use a credit card to take out money, but you'll normally be charged a 'cash advance fee' and interest.

To take money out of machines abroad you need a CIRRUS or MAESTRO symbol on your card. The money comes out of your account in pounds and pence, but the money you get is in local currency. Check with your card provider where you can use your card and any charges.

Banking services
What is a standing order?
This is when your bank makes a payment for you on a set date. The money comes straight from your account, so it is useful for making payments of the same amount, to the same company, at regular times. You control the standing order, so you set the amount, number and date of payments. You set up standing orders direct with your bank.

What is a direct debit?
Direct debits are very useful for paying bills where the amounts vary each time, like monthly phone bills. You get a direct debit form from the company you wish to pay. This lets the company ask your bank to pay them directly from your account - no matter what the bill is. Unlike a standing order, direct debits are controlled by the company you are paying - they ask the bank for the money from your account each month. You can save money on bills by paying with direct debits, as some companies give a discount.

What is an account transfer?
An account transfer is where you transfer money from one account to another. This can be either accounts held within the same branch by the same person, or accounts held by different people in different banks. If they are between accounts held by different people in different banks it can take a few days to happen, but there are often no charges for this service.

What is CHAPS?
These are electronic payments the bank makes for you to another bank. It's usually used when you need to move big sums of money, like when you buy a house. Banks guarantee the money gets to the other bank on the same day, if you tell them by a set time. Banks normally make a charge for CHAPS payments.