He had a funny card outside saying "Cheese" (7)
I believe the answer is:
cheddar
'saying cheese' is the definition.
'cheddar' can be an answer for 'cheese' (cheddar cheese is a kind of cheese). I'm not sure about the 'saying' bit.
'he had a funny card outside' is the wordplay.
'he had' becomes 'he'd'.
'a funny' indicates anagramming the letters.
'outside' means one lot of letters goes inside another.
'card' with letters rearranged gives 'cdar'.
'hed' placed inside 'cdar' is 'CHEDDAR'.
Can you help me to learn more?
(Other definitions for cheddar that I've seen before include "English cheese variety" , "Somerset village" , "Somerset gorge location" , "Firm cheese as made in Somerset" , "Hard cheese" .)