1. Cash Purchase – the goods and services are paid for in cash, by cheque or by laser at the time of purchase.

2. Credit Purchase – the buyer receives the goods immediately but agrees to pay the seller at a later date.

3. Credit Cards/ Store Cards – Customers use credit cards as a means for paying for goods and services. Store Cards are similar to credit cards except they can only be used in a particular shop.

4. Renting – paying for the use of a good for a short or long period of time without ever owning the good.

5. Hire Purchase – is used by households to purchase items such as fridges, home computers, audio equipment etc.

The hire purchase deal involves three parties – the buyer, the seller and a financial institution.

The financial institution pays the seller in full for the asset and then collects regular instalments form the buyer over an agreed period of time.

These instalments in total will cover the purchase price, interest charges and the financial institution’s fee.