F1.6 Compare interest rates, annual fees, and rewards and other incentives offered by various credit card companies and consumer contracts to determine the best value and the best choice for different scenarios.
Activity 1: The Choice is Yours
Have students research to identify the differences and similarities between a similar credit card at three different financial institutions. Have them compare the cards’ interest rates, annual fees, and incentive programs.
Then ask students to make a list of criteria that a consumer should consider when selecting a credit card.
Finally, ask the following questions:
- How can the interest rates, annual fees and incentive programs influence a person’s decision in selecting a credit card?
- Is this card available to all? If so, what features justify its status as the best credit card? If not, how can we create a more inclusive financial world if not all citizens can benefit from a similar economic situation? Explain your reasoning.
Activity 2: Why Borrow?
Present the following scenario to students:
Jacob doesn't want a credit card. He claims that using a debit card is more favourable than a credit card since:
- The debit card has little or no fee.
- The debit card does not use a borrowing system, so if you don't have the money, you can't buy the item you want.
- A person never pays interest on money used with a debit card.
Use your knowledge of credit cards to explain to Jacob that although his arguments are valid, in some cases credit cards can be beneficial.
In your answer, refer to cash back, incentives, as well as getting someone's credit for future purchases.