US Spending Down

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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US Spending Down

By Credit Federal | Published 01/7/2009

Discover U.S. Spending MonitorSM Tumbles 3.1. Points to New Low. Too much debt? Consider credit counseling or chargeoff a portion through debt settlement.

The Discover U.S. Spending Monitor fell for the fourth consecutive month in December, declining more than three points to a new low of 76.6 (based out of 100). Both components of the monthly spending index - consumer confidence in the U.S. economy and consumer spending intent - reached new lows during the month, as concerns about the economy may be weighing on post-holiday spending plans.

A record high 65 percent rated the economy as poor, and 70 percent said things were getting worse. Personal finances did not fare any better as a record low number of Americans - 35 percent - gave their own finances a good or excellent rating, and a record high number - 23 percent - rated them as poor. A majority, 55 percent, said their personal finances were getting worse in December.

The economic and financial angst consumers are feeling has them ratcheting down spending plans in January.

Record Number of Consumers Plan on Cutting Back Discretionary Spending

According to the results of surveys conducted for the Monitor during December, the outlook for spending at the start of the New Year appears to be a continuation of the belt-tightening consumers have been practicing over the last few months. Over one-third (34 percent) of consumers plan to spend less in January. This compares to 22 percent in November and just 24 percent from a year ago.

"While a post-holiday drop-off in spending intentions is expected, the 10-point gap between this year and last year's numbers may be an indication of how consumers are feeling about the economy and the spending plans they are making in light of the crisis," said Julie Loeger, senior vice president of brand and product management for Discover Financial Services. "The gap was a bit surprising considering household expense expectations were much higher a year ago, but economic sentiment was clearly not as poor as it is now."

Even as a record high 68 percent of consumers say they intend to have the same or lower expectations for household expenses like gas and groceries in January, the relief from lower gas prices has not prevented a record high number of consumers from planning to pull back discretionary spending in every one of the spending categories tracked by the Monitor. Nearly 55 percent are trimming discretionary and home improvement expenses, and 52 percent are holding off on major personal purchases. All of these numbers were nearly three points higher than last month. The only discretionary category that saw a planned increase in spending was savings and investing where 12 percent of consumers planned on saving more, up 2 points from last month.

Parents with kids at home were among the most aggressive cost-cutting groups heading into the new year. More than 37 percent of the group claims that it will spend less in the first month of 2009. That's up 17 points from last month and more than 10 points from December 2007. Nearly 59 percent of this group intends to cut discretionary spending in January 2009. That's 4 points higher than both the Monitor's average and the average for married couples without kids.

Lower Consumer Holiday Spending Intentions Coincide with Retail Results

Despite the availability of deep discounts, numbers from the Monitor showed many more consumers planned to shell out less money on holiday gifts than last year and judging by retail numbers, those plans came to fruition. Two-thirds (63 percent) of the nation's shoppers planned on spending less on gifts this season, and only 10 percent said they expected to spend more. In contrast, the same survey taken last year showed only 52 percent of consumers planning to spend less, and 19 percent planning to spend more.

Parents with kids at home were also very cost-conscious during the holiday shopping season. Sixty-six percent of this group, compared to 63 percent of the Monitor's average, planned on spending less this year than last. Only lower-income Americans were more aggressive cost cutters over the holiday with 70 percent saying they planned on spending less than they did during the same period in 2007.

Majority of Consumers Still Have Money Left Over Despite Holiday Expenses

In terms of managing their monthly expenses, consumers continue to do a remarkably good job. Half the country (51 percent) expects to have money left over after paying their bills for December. That's on par with last month and 2 points higher than what the Monitor reported a year ago.

In December 2008, 72 percent of the consumers with money left over had the same or more money left over than the month before, exactly the same as a year ago. However, there was a 5-point drop in this number from what was reported in November, most likely due to holiday gift expenses.

Record Low Number of Consumers View the Economy and Personal Finances as Good or Excellent

Last year at this time, 27 percent of the country rated the economy as good or excellent and only 35 percent said it was poor. This year, only 7 percent give the economy a good or excellent rating and 65 percent say it is poor.

Consumer attitudes about their personal finances have a less volatile deterioration, but are still at record lows. This December, 35 percent of American adults rate their own financial situation as good or excellent. That's 4 points off the 39 percent reported a year ago.

"A majority of consumers have responded to the nation's economic crisis by cutting spending," Loeger said. "While this may not be helpful to the economy, consumers are keeping their budgets in balance, which may give them more confidence in the months ahead should the economy turn a corner."

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US Spending Down - by <a href=http://creditfederal.com>CreditFederal.com</a> <div style="text-align: left; font-family: Verdana;">Discover U.S. Spending MonitorSM Tumbles 3.1. Points to New Low. Too much debt? Consider <a target='_top' target="_top" style="font-weight: bold;" href="../../../credit-counseling.html">credit counseling</a> or <a target='_top' target="_top" style="font-weight: bold;" href="../../../chargeoff-credit-card.html">chargeoff</a> a portion through debt settlement. The Discover U.S. Spending Monitor fell for the fourth consecutive month in December, declining more than three points to a new low of 76.6 (based out of 100). Both components of the monthly spending index - consumer confidence in the U.S. economy and consumer spending intent - reached new lows during the month, as concerns about the economy may be weighing on post-holiday spending plans. A record high 65 percent rated the economy as poor, and 70 percent said things were getting worse. Personal finances did not fare any better as a record low number of Americans - 35 percent - gave their own finances a good or excellent rating, and a record high number - 23 percent - rated them as poor. A majority, 55 percent, said their personal finances were getting worse in December. The economic and financial angst consumers are feeling has them ratcheting down spending plans in January. Record Number of Consumers Plan on Cutting Back Discretionary Spending According to the results of surveys conducted for the Monitor during December, the outlook for spending at the start of the New Year appears to be a continuation of the belt-tightening consumers have been practicing over the last few months. Over one-third (34 percent) of consumers plan to spend less in January. This compares to 22 percent in November and just 24 percent from a year ago. "While a post-holiday drop-off in spending intentions is expected, the 10-point gap between this year and last year's numbers may be an indication of how consumers are feeling about the economy and the spending plans they are making in light of the crisis," said Julie Loeger, senior vice president of brand and product management for Discover Financial Services. "The gap was a bit surprising considering household expense expectations were much higher a year ago, but economic sentiment was clearly not as poor as it is now." Even as a record high 68 percent of consumers say they intend to have the same or lower expectations for household expenses like gas and groceries in January, the relief from lower gas prices has not prevented a record high number of consumers from planning to pull back discretionary spending in every one of the spending categories tracked by the Monitor. Nearly 55 percent are trimming discretionary and home improvement expenses, and 52 percent are holding off on major personal purchases. All of these numbers were nearly three points higher than last month. The only discretionary category that saw a planned increase in spending was savings and investing where 12 percent of consumers planned on saving more, up 2 points from last month. Parents with kids at home were among the most aggressive cost-cutting groups heading into the new year. More than 37 percent of the group claims that it will spend less in the first month of 2009. That's up 17 points from last month and more than 10 points from December 2007. Nearly 59 percent of this group intends to cut discretionary spending in January 2009. That's 4 points higher than both the Monitor's average and the average for married couples without kids. Lower Consumer Holiday Spending Intentions Coincide with Retail Results Despite the availability of deep discounts, numbers from the Monitor showed many more consumers planned to shell out less money on holiday gifts than last year and judging by retail numbers, those plans came to fruition. Two-thirds (63 percent) of the nation's shoppers planned on spending less on gifts this season, and only 10 percent said they expected to spend more. In contrast, the same survey taken last year showed only 52 percent of consumers planning to spend less, and 19 percent planning to spend more. Parents with kids at home were also very cost-conscious during the holiday shopping season. Sixty-six percent of this group, compared to 63 percent of the Monitor's average, planned on spending less this year than last. Only lower-income Americans were more aggressive cost cutters over the holiday with 70 percent saying they planned on spending less than they did during the same period in 2007. Majority of Consumers Still Have Money Left Over Despite Holiday Expenses In terms of managing their monthly expenses, consumers continue to do a remarkably good job. Half the country (51 percent) expects to have money left over after paying their bills for December. That's on par with last month and 2 points higher than what the Monitor reported a year ago. In December 2008, 72 percent of the consumers with money left over had the same or more money left over than the month before, exactly the same as a year ago. However, there was a 5-point drop in this number from what was reported in November, most likely due to holiday gift expenses. Record Low Number of Consumers View the Economy and Personal Finances as Good or Excellent Last year at this time, 27 percent of the country rated the economy as good or excellent and only 35 percent said it was poor. This year, only 7 percent give the economy a good or excellent rating and 65 percent say it is poor. Consumer attitudes about their personal finances have a less volatile deterioration, but are still at record lows. This December, 35 percent of American adults rate their own financial situation as good or excellent. That's 4 points off the 39 percent reported a year ago. "A majority of consumers have responded to the nation's economic crisis by cutting spending," Loeger said. "While this may not be helpful to the economy, consumers are keeping their budgets in balance, which may give them more confidence in the months ahead should the economy turn a corner." </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.