Personal Spending

Looking for a Credit Card for Christmas Shopping? Before you submit a credit card application, first review the main points which will help you choose the right credit card for your needs.

What Charges You'll Make - If you're going to use the credit card mainly for booking airline reservations and hotels, it might be best for you to get a travel credit card that offers sky miles and hotel points or cashback. If this will be an emergency credit card only, then your main concern may be for a low interest rate credit card with low fees.

When You'll Repay Charges - Will you pay off credit card charges in full every month, or will you carry a balance month to month? If you're going to carry a balance, you want the lowest possible interest rate as well as a low introductory rate. But if you'll payoff balances in full every month, then interest rate really doesn't matter so no annual fee and/or a long grace period would be a bigger concern. If you're going to carry a balance, be concerned about how the finance charge is calculated. The most common method is the Average Daily Balance, which means that the daily balances are added together and then divided by the number of days in the billing cycle. Stay away from credit cards that compute the balance using two billing cycles, as this method costs more money in financing fees.

What Amount You'll Charge - If you're going to use the credit card for all your monthly expenses, then you need a card that has a high credit limit and a high cashback percentage.

More info about Interest Rates, Credit Limits, Incentives, Fees and Penalties

Interest Rates - The interest rate (Annual Percentage Rate) APR can either be a fixed rate or a variable rate that is tied to another financial indicator, most commonly the prime rate. With a fixed rate credit card you know what the interest rate will be every month, whereas a card with a variable rate can fluctuate. Of course, even the interest of a fixed rate card can change based on certain events, such as paying your credit card bill late, exceeding your limit, or simply because the credit card issuer decides to change it after providing you ample advance notice.

Credit Limit - This is the amount of money the credit card company will let you charge to the card. This amount varies depending upon the card offer and your credit history. Be sure to get a credit card with an ample limit, because getting close to your max can hurt your credit score. Just remember that you don't have to max out your limit just because it's available.

Incentives - To compete for and to gain customers, many credit card companies offer rewards. Even if you normally use cash, why not use your credit card and then use the cash to make the payment during the grace period? You still won't pay interest and meanwhile you'll rack-up rewards. A credit card with 5% cashback will earn you $5 for every $100 charged. If your total bills come to $2,000 per month, you'll earn a free $100 every month. Look for a rewards program that you'll use and which offers flexibility, such as cashback or travel.

Fees and Penalties - Compare common charges such as late fees, overlimit fees, balance transfers, cash advances, and for making payments by telephone. Regarding balance transfers, look for credit card offers with no transaction fees and zero percent interest for at least 12 months.

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Personal Spending

By Credit Federal | Published 06/1/2008

Are Americans slowing their decent into bankruptcy? Last month income levels remained the same, and personal spending had a meager 0.2% increase. Does this mean more Americans are saving money?

Consumer spending levels give a good indication of how the economy is doing. Typically, the more spending the more confidence consumers have in the economy. But, higher spending could also be a reflection of rising living costs, like fuel and food.

According to the Commerce Department, personal income was up only 0.2% last month.

The chief economist at National City Corp. in Cleveland, Richard DeKaser, said: "Consumer spending is slowing due to a combination of factors; slowing income growth, higher energy prices and a greater propensity to save. The slowing income gain is due to a weakening job market."

Referring to a fiscal stimulus package to pump cash into U.S. households, he said, "We have a challenged consumer, but we have help on the way with the refund checks, which will be significant in the summer months."

Excluding volatile food and energy prices, the core PCE price index, which is the Federal Reserve's preferred measure of inflation, rose 0.1% as expected, slowing from a 0.2% increase two months ago.

Financial markets took heart from the muted reading on core price pressures, with the dollar advancing and U.S. government Treasury bonds rising in price.

Another variable in the economic equation: Consumers are using their tax rebate checks to pay bills

According to surveys, sales data and interviews with people from Florida to California, although the federal government tax rebates were designed to invigorate spending and kick-start a troubled economy, many Americans are so consumed by bills and the soaring price of gas that they are using the money to pay bills or to save.

So far the Treasury handed out more than $50 billion of the $100 billion in tax rebates it plans to distribute to 132 million households. But only once in the last six weeks have chain stores registered an increase in sales, according to the International Council of Shopping Centers, whose weekly sales survey is a widely watched barometer.

Most experts assume that over the next six months, Americans will spend somewhere between 20 and 50 percent of their tax rebates, much like the last time the government took out its checkbook in such fashion, in 2001. That would mean $20 billion to $50 billion in fresh spending washing through the economy.

Given that consumer spending amounts to 70 percent of all American economic activity, such a surge should keep the economy growing at a modest rate through much of the summer, economists say. It would moderate layoffs if companies, buoyed by resurging sales, hang on to workers.

But by late in the year, experts say, the effects of the rebates will wear off, leaving the economy grappling with the same ills gnawing at it now: tight credit, making it hard for businesses to expand and consumers to borrow; a deteriorating job market, which is eroding paychecks; and falling real estate prices.

Families have spent beyond their income levels, getting by month-to-month by charging on credit cards and taking loans against the value of their homes. The federal government preached on the value of saving money, but now; in view of a troubled economy, the government is handing out free money and is begging Americans to splurge to stimulate the economy. While it's a good strategy, will it confuse many households?

Many households are now too worried about the rising cost of driving and eating to spend freely, even though free government cash is headed their way.

In low income households, the free government money is being spent to catchup on unpaid bills, or set aside as emergency cash.

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Personal Spending - by <a href=http://creditfederal.com>CreditFederal.com</a> <a href="http://creditfederal.com/free-credit-offers.html"><img src="http://creditfederal.com/article/content_images/personalfinancenewsletter.jpg"></a> <div style="text-align: left; font-family: Verdana;">Are Americans slowing their decent into <a href="http://creditfederal.com/file-bankruptcy.html">bankruptcy</a>? Last month income levels remained the same, and personal spending had a meager 0.2% increase. Does this mean more Americans are <a href="http://creditfederal.com/article/articles/326/1/Personal-Savings">saving</a> money? Consumer spending levels give a good indication of how the economy is doing. Typically, the more spending the more confidence consumers have in the economy. But, higher spending could also be a reflection of rising living costs, like fuel and food. According to the Commerce Department, personal income was up only 0.2% last month. The chief economist at National City Corp. in Cleveland, Richard DeKaser, said: "Consumer spending is slowing due to a combination of factors; slowing income growth, higher energy prices and a greater propensity to save. The slowing income gain is due to a weakening job market." Referring to a fiscal stimulus package to pump cash into U.S. households, he said, "We have a challenged consumer, but we have help on the way with the refund checks, which will be significant in the summer months." Excluding volatile food and energy prices, the core PCE price index, which is the Federal Reserve's preferred measure of inflation, rose 0.1% as expected, slowing from a 0.2% increase two months ago. Financial markets took heart from the muted reading on core price pressures, with the dollar advancing and U.S. government Treasury bonds rising in price. Another variable in the economic equation: Consumers are using their <a href="http://creditfederal.com/article/articles/456/1/Faster-Tax-Rebate-Checks">tax rebate checks</a> to pay bills According to surveys, sales data and interviews with people from Florida to California, although the federal government tax rebates were designed to invigorate spending and kick-start a troubled economy, many Americans are so consumed by bills and the soaring price of gas that they are using the money to pay bills or to save. So far the Treasury handed out more than $50 billion of the $100 billion in tax rebates it plans to distribute to 132 million households. But only once in the last six weeks have chain stores registered an increase in sales, according to the International Council of Shopping Centers, whose weekly sales survey is a widely watched barometer. Most experts assume that over the next six months, Americans will spend somewhere between 20 and 50 percent of their tax rebates, much like the last time the government took out its checkbook in such fashion, in 2001. That would mean $20 billion to $50 billion in fresh spending washing through the economy. Given that consumer spending amounts to 70 percent of all American economic activity, such a surge should keep the economy growing at a modest rate through much of the summer, economists say. It would moderate layoffs if companies, buoyed by resurging sales, hang on to workers. But by late in the year, experts say, the effects of the rebates will wear off, leaving the economy grappling with the same ills gnawing at it now: tight credit, making it hard for businesses to expand and consumers to borrow; a deteriorating job market, which is eroding paychecks; and falling real estate prices. Families have spent beyond their income levels, getting by month-to-month by charging on credit cards and taking loans against the value of their homes. The federal government preached on the value of saving money, but now; in view of a troubled economy, the government is handing out free money and is begging Americans to splurge to stimulate the economy. While it's a good strategy, will it confuse many households? Many households are now too worried about the rising cost of driving and eating to spend freely, even though free government cash is headed their way. In low income households, the <a href="http://creditfederal.com/free-money-grants.html">free government money</a> is being spent to catchup on unpaid bills, or set aside as emergency cash. </div> This article provided courtesy of <a href=http://creditfederal.com target=_new>www.CreditFederal.com</a>, a personal credit resource of good or bad credit credit cards and loans.

Credit Tip: Need a high limit for Christmas credit card charges? If you have bad credit, consider a personal loan by refinancing your mortgage. Even if you have cash to buy Christmas presents, we recommend using a prepaid card to make purchases because it's safer than carrying cash.