Credit card promotional offers

Consider the Canadian Bank Saver credit card promotion. The card offers a wide range of promotions for new customers.

Credit card promotional offers

Banks and credit card companies are always looking for new and innovative ways to entice customers to sign up for their credit card. Strategies can include:

• introductory offers
• 0% APR for the first year
• the attachment of purchases to a rewards program
• no foreign transaction fees
• $0 annual fee for specific customers

These promotional offers vary from company to company and are designed to lure people in and have them spend their money. Some credit card companies offer rewards that can help make the most of spending. Be warned that if you do not pay off credit card statements in a consistent and timely manner, it will affect your credit rating.

Complete the Credit Card Offers and Promotional Techniques Research in your notebook or using the following fillable and printable document.

Research two credit card offers and examine the promotional techniques used by the credit card company. Explain the meaning of each of these offers and identify any offers that include fine print with added information.

In your research, make note of whether you would suggest this credit card while reflecting on:

• Why might certain cards require a level of income to qualify? What might this ensure for these credit card companies?
• To whom might your credit card be of value?
• Are any of the credit cards that you have researched geared towards students? What do these cards offer?
• What would you advise potential consumers if they were to sign up for this credit card?

Is it worth it?

Let’s explore three different credit card reward programs to determine whether or not they are of value. The following scenarios assume that the balance is paid in full each month and the credit card is not used for cash advances.

If you would like, you can complete the next word problems using TVO Mathify. You can also use your notebook or the following fillable and printable document.

Comparing credit card offers

Now that you have had the opportunity to research and learn about promotional offers related to credit cards, let’s explore three sample credit card offers below.

Work with a partner or with someone at home, if possible, and discuss the cards and their offers together before beginning the activity:

After you have carefully reviewed each of the above credit cards and their respective offers, complete the Credit Card Comparison in your notebook or using the following fillable worksheet.

1. Who might be the target audience for each of these credit cards?

2. Of the three credit cards, which do you feel offers the best value? Why? If needed, provide calculations where necessary to support your answer.

Credit card interest charges

If you would like, you can complete the next activity using TVO Mathify. You can also use your notebook or the following fillable and printable document.

After comparing the three credit card offers, an author has decided to sign up for the Platinum Visa credit card described in the table. The account is activated on May 10.

1. Calculate the interest charged, at 19.99% simple interest, on the payment date of June 20th, if the credit card bill is not paid off entirely. Be sure to calculate the duration of time between May 10 and June 20.

2. Calculate the additional interest and total interest due on the following payment of July 20th if the author has yet to pay off their bill. *Note, you will need to use the compound interest formula to calculate this total interest.

3. How much will the author have paid including both interest and annual fees?

Minimum payment and compound interest

Oftentimes, people may think that paying the minimum monthly payment towards a credit card bill is sufficient. With this logic, it will forever feel like you are chasing a balance and can’t keep up. What consumers fail to realize is that compound interest can result in costly interest charges if they do not pay off their balance every month.

Let’s explore the amount of interest that a consumer will be paying on their credit card balance.

If you would like, you can complete the next activity using TVO Mathify. You can also use your notebook or the following fillable worksheet.

Reflection

As you read the following descriptions, select the one that best describes your current understanding of the learning in this activity. Press the corresponding button once you have made your choice.

Now, expand on your ideas by recording your thoughts using a voice recorder, speech-to-text, or writing tool.

When you review your notes on this learning activity later, reflect on whether you would select a different description based on your further review of the material in this learning activity.

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