This might be a fun and quick activity for your students.  Give them ten minutes to search on the web and see who can find the credit card with the lowest interest rate (note:  excludes credit cards offering a 0% APR for an introductory period!).  Be sure they list their source.

This is not as easy an exercise as you might expect.  For one, when you google “credit card with lowest interest rates” most of the top results come from credit card comparison sites, which may have their own set of biases due to advertising relationships.  Second, many card companies offer 0% APR for an introductory period which puts them atop the rankings for lowest cost cards.  Students will have to do a little digging to find a credit card with a low APR that doesn’t have a 0% APR offering.  The truth is that these low-interest rate cards do not typically have these 0% APR offers since their low interest rates tend to be a good marketing tactic.

So, what did I find in my 10 minute search?:

• Simmons Bank Visa Platinum with 7.25% APR on Purchases (Credit.com)

This exercise could lead to a good discussion with these leading questions:

• How was the process?
• What is APR, in your own words?
• What does a variable interest rate mean?
• Why do you think you see so many 0% APR cards out there?
• Did any of you read the “Advertiser Disclosure” on the credit card comparison sites?  Does this impact the way you think about those sites?
• What type of credit card user would be most interested in a card with a low interest rate?  Revolver or someone who pays off their balance every month.
• What type of credit score do you think you need in order to score one of these low-interest rate cards?
• What type of rewards program do you expect a low-interest rate card program to have?

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.