Daily news stories on latest personal finance news.http://www.welcomefinancial.com/news/industry-news.aspx
This week, the Baltimore Examiner offered several tips from the National Federation for Credit Counseling on how consumers can help themselves emerge from debt in 2009.

"Many consumers have been renting their lifestyle by living off credit, and it's time they took ownership," Gail Cunningham of the NFCC told the newspaper.

Some of the organization's tips include keeping a daily log for 30 days of all personal expenditures to identify any spending patterns that need changing. Others are to develop and stick to a budget that includes debt repayment as well as living expenses, with a focus on avoiding any new debt increases, and to have ten percent of each paycheck deposited into an interest-bearing account.

Elsewhere, the Dallas Morning News offered its own suggestions for consumers eager to make debt reduction part of their new year strategy.

The newspaper advises keeping a summary sheet that lists creditors, due dates, account status, and similar information, and to contact creditors as well as possibly credit counseling services to negotiate lower interest rates. Debt consolidation is also an attractive goal for those able to open new lines of consumer credit.


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This week, Washington Post financial columnist Michelle Singletary spoke with the National Federation for Credit Counseling (NFCC) about some of the red flags consumers should be aware of.

Singletary warns that consumers should be especially careful about any company that initiates contact with them, since it's likely they are working from purchased mailing lists of consumer facing debt trouble.

"Companies target vulnerable people who are desperate to get out of debt and make the collection efforts stop," Gail Cunningham of NFCC was quoted as saying.

Consumers are also widely advised to steer clear of any debt management company that requires a substantial up-front payment for their services, or in some cases, just an initial consultation. Another major red flag is any company that advises giving them power of attorney or which suggests consumers should stop communicating with creditors and paying their debts directly.

One way to avoid such pitfalls is to contact a non-profit credit counseling service. A long-term debt management strategy is also important. In many cases, consumers can save money by using payday loans to meet their payment deadlines as opposed to paying credit card late fees and higher interest rates.


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This week, the Los Angeles Times offered some tips on how consumers can pay down their holiday debts and keep themselves on the right financial track.

Among the tips were to put your credit cards "on ice," taking them out of your wallet until the debts are paid. Consumers are also advised to get an early start on next year's holiday budget as opposed to carrying their debt burdens year after year, and to pay down their highest interest cards first, as well as always meeting monthly minimums.

Consumer credit counseling services are also recommended for those having more trouble with personal debt.

The Palm Beach Post offered similar tips this week from the Association of Independent Consumer Credit Counseling Agencies. Along with the above pointers, consumers can also consider cutting spending on unnecessary luxuries and dining out, as well as finding a second income to help pay down their debts.

For those having trouble meeting their minimum payments and credit card due dates, payday loans can be an alternative to late fees.



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This week, several economists told the Associated Press that signs of economic growth should slowly start to appear in the third quarter of 2009 - but before that, they're predicting the gross domestic product will shrink by four percent in the first quarter of the year.

"It's a struggle to say there is an upbeat outlook. We would not call the forecast for 2009 optimistic," Richard DeKaser of National City Corp. told the AP.

According to the report, at least 33 state economies are currently in recession, and unemployment could easily hit nine percent before things start getting better.

In a separate report, the Chicago Sun Times interviewed four prominent retail analysts who predicted that the beginning of 2009 could see up to 40 retail chains fail, along with up to 12,000 store closings.

In the current climate, many consumers are justifiably worried about their jobs and personal finances. With that in mind, sound debt management and fiscal discipline are more important than ever in the current climate.



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In Dallas alone, plans are underway for one local nonprofit credit counseling service to add up to 40 new workers in 2009 in response to the growing demand, according to the Dallas Business Journal.

"This is generally a very dead month, and we're slammed right now," Todd Mark of Consumer Credit Counseling Service of Greater Dallas told the publication.

Meanwhile, the Los Angeles Times cautioned consumers this week that in some cases, unscrupulous credit counseling services can actually make their finances worse.

The newspaper advises consumers to do their homework carefully before choosing a credit counselor. For example, potential clients should be able to receive any and all information about fees in an up-front and clear manner. An organization that pays its employees commission for signing up new customers is also seen as a red flag, as are "guarantees" that debt or bad credit ratings can be made to disappear.

For those having trouble making minimum payments and keeping up with their own debt burdens, one possible strategy for your financial recovery could include payday loans to avoid missing payment deadlines.


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Writing on MSNBC.com, Tisdale advises consumers carrying credit card debt to try to stick to cash and debit cards to keep better tabs on their spending. She also advises against incurring penalties by missing minimum monthly payment deadlines, and points out that cards with the highest interest rates should generally be paid off first.

"Or, pay off the card with the lowest balance first. It's very satisfying to pay off a debt in full. It can be a great motivator," she adds, going on to emphasize the importance of examining your spending habits to become more aware of what may lead you to overspend in the first place.

Elsewhere, Kathleen Splaine of the University of Delaware told WDEL radio that another tip consumers can consider is to eliminate two dollars in spending per day, with an eye on saving enough money to cover next year's holiday expenses.

Meanwhile, many consumers are still struggling in the short term to pay off holiday debts. If credit card deadlines are looming, one way to meet your short term financial needs could be to consider a payday loan.


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This week, an executive with Equifax told Reuters that delinquencies have been rising "across the board" in recent months, including personal credit, auto loans and mortgages. This could be a bad sign for any potential economic recovery, since it indicates that consumers have stretched out their lines of credit and are now either falling into default or focusing more on saving.

Reuters also noted that bankruptcies were up 37 percent over the past year about 12 percent of subprime credit card holders were 60 days behind on payments.

Meanwhile, the federal government reported this week that personal incomes had dropped slightly last month, while consumer spending fell 0.6 percent. Forbes noted that this is the fifth consecutive month of declining consumer spending, the longest such trend since at least 1959.

However, the spending drop was actually reportedly somewhat smaller than the 0.7 percent that many economists were expecting.

With credit options drying up for many consumers, there are other ways such as pay day loans to meet short term cash needs.



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Forbes recently reported that American financial institutions have been seeing a spike in data breaches, which in many cases turn out to be company employees hoping to sell the information to identity thieves.

The magazine cited data from the Identity Theft Resource Center showing that while seven percent of known data breaches took place at banks in 2007, that number should rise to about 11 percent at the end of 2008.

"They have access to the data, and they know how to use it. Desperation is never a good thing," Rex Davis of ITRC told Forbes.

According to the Federal Trade Commission, more than nine million Americans are victims of identity theft each year. The agency recommends that those who are victimized by the crime should start by filing an identity theft report with their local police department and also contacting their creditors. Victims are also advised to file ID theft complaints with the FTC.

Identity theft can be an especially difficult crime to recover from because victims often find it difficult at first to rebuild credit and clear up the debts they never ran up.


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According to the latest figures from the Commerce Department, the U.S. gross domestic product declined by 0.5 percent in the last quarter. With these latest numbers, the economy has now been in a recession for about a year.

Much of the downward pressure on the economy can be traced to a drop in consumer spending. The third quarter figures showed that personal consumption expenditures fell 3.8 in the third quarter, compared to 1.2 percent increase in the second.

The tough economy has led many consumers to scale back their expenses and to put a higher emphasis on saving and debt reduction than they have in years. At the same time though, lenders have also scaled back their own lines of credit, giving many consumers fewer options to spend with credit in the first place.

For those who are trying to make do with less credit and keep up with existing balances, there are a variety of financial tools, such as payday loans, to help meet day to day expenses.


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In a recent survey of 1,004 consumers, Bankrate found that 32 percent are planning to use their credit cards less in 2009, while 15 percent do not plan to use them at all.

Relatively few people (six percent) reported that their lines of credit have actually been cut in recent months, while 41 percent said their credit limits had actually been increased. The survey also found that 40 percent are unconcerned by the prospect of having their credit card limits scaled back, possibly indicating the desire by many people to pay down existing balances in the short term.

Consumers will find it easier in the coming months to pay down some personal debts in light of new federal rules concerning the way lenders can charge interest fees and handle other billing practices.

The new regulations are due to take effect on July 1, 2010, but the Office of Thrift Supervision last week called on institutions under its supervision to "make their best efforts to conform as soon as practical" to the new rules, especially those pertaining to high-fee credit cards.

With many consumers still feeling limited access to credit and a shaky short-term cash situation, some may find that payday loans can be part of their strategy for making ends meet.


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In a recent survey from the Center for Economic and Entrepreneurial Literacy, just over a third of respondents reported that they had a budget plan in place that would help them eliminate their credit card debts in 2009.

The survey also found that just under a half of respondents knew what a subprime mortgage is, half admitted to overdrafting their checking account at least once, while a third said they had paid at least one late bill recently.

“It is clear that we need to increase personal finance education for adults so we have better informed employees, borrowers, and voters," said CEEL managing director James Bowers. The organization recently announced a campaign to better educate the public and policy makers about the importance of making good financial decisions.

For those struggling with their finances, becoming better informed on financial matters can be very helpful and important. There are also a variety of short-term ways to deal with financial shortfalls, such as pay day loans and other options.


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According to the Association for Financial Professionals, 55 percent of those surveyed expect the economy to continue to weaken in 2009, while 29 percent expect things to remain about the same as they are now.

The survey also found that 49 percent expect their organizations to cut jobs over the next year, while 56 percent reported that they had considered doing so. And, 65 percent said their companies had either frozen or reduced hiring in recent months.

A total of 92 percent said they had cut costs or used other strategies to deal with the recession and credit crunch, which has been a major factor in stifling job creation.

"Tight credit markets continue to choke off businesses' ability to grow and hamper economic recovery," said Jim Kaitz, president and CEO of AFP.

Looking ahead, a majority in the survey predicted that access to credit for both consumers and business would be a major factor in the economy’s future direction. For consumers currently struggling to get credit, there are various options that can also be considered, such as payday loans.


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The poll found that since last month, the number of people who consider themselves not very or not at all secure in their jobs had doubled from seven percent to 14 percent.

Each month, the Reuters/Zogby index calculates the mood of the public based on a scoring system involving ten questions. Reuters indicates that a score above 100 would indicate an improved public mood since the poll began in July of 2007. This month's score was 90.5, down from last month's 93.3 and up from March's low of 87.7.

Just over three-quarters of those surveyed said they plan to cut back on holiday spending this year, although at least 71 percent said they expect the economy to better a year from now. Also, 47 percent of those surveyed said their own finances were in positive shape, down one point from last month.

"People appear to believe the economy has hit bottom and will climb in 2009. Optimism is a good thing for the economy, but it presents a political challenge for President-elect Obama," said pollster John Zogby, adding that Democrats will need to produce results for their economic agenda by the 2010 elections.

If your own financial situation could use a boost, one option could be to make payday loans a part of your strategy.


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In its mid-season update on the shopping season, MasterCard focused on sales figures involving e-Commerce, apparel, luxury items and electronics.

The report showed that e-Commerce had actually gone up by 10.4 percent the week after Thanksgiving, compared to last year, with a decline of 4.8 percent the week after.

Still, that decline was modest compared to the other shopping figures reported by MasterCard. For example, sales of women's apparel were down 21.3 percent since last year, compared to a 16.1 percent decline for men.

Electronic sales fell by 25 percent since 2007, and luxury items were especially down, with a 33 percent drop the week after Black Friday and with a 27.8 percent drop the first week of December.

In a separate report, the Associated Press cited new figures from ShopperTrak indicating that overall holiday sales are down 1.8 percent this year compared to 2007.

Much of this year's decline can be traced to the state of the economy, although many consumers have less access to credit than they did in previous years. For those who lack sufficient cash or credit reserves but still have holiday shopping to finish, one option could be to consider a short-term payday loan.


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The Federal Reserve votes Thursday on proposals that would affect the way consumers and credit card companies deal with each other. Among the five proposals is a ban on sudden changes in the interest rate for an existing balance, as well as a ban on "two cycle" billing practices.

"Consumers relying on credit cards should be better able to predict how their decisions and actions will affect their costs," said Federal Reserve chairman Ben Bernanke this spring when the reforms were unveiled.

According to the Associated Press, one of the proposed reforms would make it difficult for subprime credit companies to continue doing business with about 70 million Americans who have "challenged credit."

One alternative for these affected consumers would be payday loans, Greg Tickner, the owner of a subprime credit card company that plans to adapt to the new policies, told the AP.

According to consumeraffairs.com, some 10 million Americans use payday loans each year, with an average loan request of about $300 each.
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Attorney Gerald Miller, a Chapter 7 bankruptcy trustee in Oklahoma, told the Muskogee Phoenix this week that consumers who make just the minimum monthly payments could find themselves taking up to 28 years to pay off a credit balance.

Miller told the newspaper that if consumers can't afford a specific purchase, they should just "go without" for the time being. He went on to point out that many people currently in bankruptcy got there because of unforeseen setbacks like medical costs and other difficulties. He also said that only about a fifth of bankruptcy cases he deals with involve irresponsible spending.

"A lot of people would hesitate if you said, 'Go down to the local bank and borrow $5,000 or $6,000 on a signature note at 28 or 32 percent interest,'" Miller told the Phoenix. "They'd say you were crazy. But that's what they do each month when they use a credit card."

Meanwhile, the federal government is expected to take action to further protect consumers this week from certain credit card practices, most notably by ending "double cycle" billing and by limiting the ways lenders can raise interest rates on cardholders.


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Meredith Whitney of Oppenheimer & Co. predicted that the lenders will scale back so much credit in part because of new accounting rules requiring them to record outstanding loans on their balance sheets, according to the Wall Street Journal. Whitney also cites upcoming regulations that will govern the ways credit card companies can raise interest rates on borrowers.

Lenders have been generally more reluctant to offer new lines of credit in the current environment, and Whitney's forecast of $2 trillion in reduced credit applied to the next 18 months. The Journal cited a recent report she wrote warning of a "dangerous and unprecedented combination" of job losses and tighter access to credit.

The tighter credit standards come at a time of already-rising consumer defaults. A separate report from Fitch Ratings last week found that 60-day delinquencies on credit cards had risen about 24 percent since August, according to the Associated Press, which also noted that as many as one in eight store credit card holders could end up defaulting.

With so much credit on the verge of drying up, consumers can explore other short-term loan options to meet their day to day cash needs.


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Despite the recent drop, Americans are still carrying a massive debt load. Last month's figures showed the combined outstanding debt for households falling from $13.94 trillion to $13.91 trillion, a 0.8 percent decrease. Still, this also happens to be the first time this report has detected any such decrease.

Even though household debt decreased somewhat last month, the Fed also noted that consumer debt, including auto loans and credit cards, was up 1.2 percent to a combined $2.6 trillion, while U.S. non-financial debt was up by a 7.2 percent annual margin. Business debt was up 2.9 percent, although this was noted to be the slowest such increase in five years.

The drop in household debt invites speculation about whether Americans are cutting back on their own spending, or whether they are simply adjusting to the effects of the credit crunch, which has dried up access to credit and resulting in the scaling back or cancellation of many lines of credit.

"The fact that net worth is going down means that people are feeling poorer and poorer and are cutting back by saving rather than borrowing," Joel Naroff of Naroff Economic Associates told the Los Angeles Times.


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The nationwide personal savings rate, which had run in the negative during 2005 and 2006, was up to about three percent in the second quarter of 2008 and 1.3 percent in the third quarter, according to the San Diego Union Tribune.

The newspaper said that Americans are shying away from their credit cards to enough of an extent that some retailers are starting to bring back layaway plans, and noted that last year's average household credit card debt was $9,900, with 13 percent owing more than $25,000.

"Right now, most people think we just have to get through this and then we can go back to living the way we used to. But if it lasts for most of 2009, then you'll start to see the fundamental shift in people's behavior," financial writer Addison Wiggins told the newspaper, discussing whether younger generations of Americans will carry lifelong lessons away from the current recession.

As they pay down their debts and increase savings, consumers have a variety of strategies to turn to, from payday loans to meet due dates to tighter budgeting and trying to seek out lower-interest rate credit cards.


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This week, the Wall Street Journal spoke with several families who have seen their college aspirations undermined by the recession.

One student, Caitlin O'Brien, left New York University and plans for a semester in Chile to attend a less expensive state college in California, while another, Nicholas Lima of Rhode Island College, is trying to get by with three part time jobs and student loans.

A parent interviewed for the story, Debbie O'Donahue, is borrowing more to keep up with her son's college bills, despite having $100,000 in debts from her children's earlier education costs.

The newspaper observed that the colleges themselves are suffering in the current environment, since many of them have lost significant amounts of money from state aid cuts and shrinking endowments. It also cited an Eduventures survey showing that a third of parents are expecting the economy to hurt their ability to pay college tuition this year, and that community colleges are seeing an upswing in interest for their lower costs.

Along with their financial aid packages and various part-time jobs, college students and others with financial deadlines to honor can also consider payday loans as part of their strategy to make ends meet.


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This week, the Denver Post offered a series of tips on how graduates and others can avoid some common financial mistakes. "By adhering to a strategy and plan, recent college graduates can avoid mistakes in how they deal with their personal finances," says the article.

The first tip is something that could apply to all Americans - "Plan to save." Before the recession, Americans had been saving less money than ever - and this can particularly apply to recent graduates experiencing newfound freedom and their first real job.

The temptation to indulge in meals and evenings out is another cash-draining situation. "Money spent is money lost," observes the newspaper.

Young adults are also warned to keep their debts under control rather than being controlled by them - particularly debts that involve high or unreasonable interest rates. They are also urged to build up a good credit rating to help when it comes time to buy a car or house. Finally, the article advises readers, even young adults, to get life insurance to ensure long-term stability for their family members.

For those having difficulty meeting regular monthly payments or other financial needs, there are various other options as well, such as short-term loans.


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This week, CNNmoney.com reported that 1.413 million college graduates were unemployed, compared to 1.282 million high school dropouts without jobs.

"A lot of the job losses are the more higher paying jobs and it's just going to mean far fewer dollars flowing into the economy," Dr. Reena Aggarwal of Georgetown University told the website.

Despite the troubling economic numbers however, the national unemployment rate for those with a degree was 3.1 percent, less than half the regular unemployment rate. Janette Marx of Ajilon Global told CNN that this percentage would probably hold steady through the recession, even though broader job losses are widely expected in the coming months.

Worse for the national employment outlook was the Labor Department's recent report about 533,000 jobs being lost nationwide in November.

The unemployment rate is taking a toll on state governments as well. WTVW in Indiana reported recently that five states currently have less than three months left of funding for unemployment benefits, while another eight states have less than six months of funds.

Making ends meet is becoming tougher for millions of people, although there are some options such as payday loans to help meet short term financial needs.



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The Mortgage Bankers Association recently released statistics showing that foreclosures in the third quarter of 2008 had climbed to 6.99 percent of all loans on residential properties consisting of one to four units.

One potential bright spot in the figures was the slight drop in the number of foreclosure actions that were initiated in the third quarter. However, there was still a jump in the number of properties that are 90 days or more past due.

Given the latest number, observers remain somewhat pessimistic about the future.

"We have not gone into past recessions with the housing market as weak as it is now so it is likely that a much higher percentage of delinquencies caused by job losses will go to foreclosure," said Jay Brinkmann of the Mortgage Bankers Association. He added that the national numbers are being especially weighed down by ongoing difficulties in California and Florida real estate.

Overall, Brinkmann estimates that 2.2 million foreclosure actions will have been initiated in 2008, with 580,000 in the second quarter and a slightly small 575,000 in the third.


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The website badcreditoffers.com notes that its statistic is due to rising delinquencies on everything from mortgages to credit cards among increasingly squeezed middle class consumers.

"Unfortunately this trend toward bad credit will likely continue in the near-term, as people struggle to make payments on their homes, their cars, and their credit cards," said website spokesman TJ Smith.

Smith also predicted "a spike in credit card defaults in 2009" as growing numbers of consumers have difficulty paying off debts and in many cases, finding new jobs. This means that tens of millions of Americans are likely to face higher borrowing costs - specifically, high interest rates - and have a far more difficult time actually eliminating their debt.

With credit markets as tight as ever and with many consumers unable to gain new or reasonable lines of credit, there are still various short-term loan options they can explore to meet their immediate financial needs.


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MSNBC reported this week that a growing number of Americans are trying to keep afloat financially by selling body products like blood plasma, their hair, and sperm or eggs.

"It's people who suddenly see it as a viable way to make a chunk of change all at one time," Mary Fusillo, director of a reproductive services clinic in Texas, told the network. Fusillo added that women inquiring about donating eggs had climbed to about 20 a day from two in recent weeks.

The report cited figures showing that people can receive up to $50 for blood plasma, $200 for a "shiny ponytail" and up to $7,000 for a fertile egg.

However, would-be donors are also cautioned that they are just as likely to end up being disappointed, since in most cases they must meet various screening criteria to actually sell any body products.

Meanwhile, those who would prefer to meet their day-to-day cash needs through other methods can always take advantage of other options like cash advance loans.



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The Mortgage Bankers Association reports this week that the volume of mortgage loan applications jumped 51.4 percent over the previous week, even though the business week was shortened by Thanksgiving.

The organization also noted that refinancing activity had gone up to 69.1 percent of total applications, from 49.3 percent a week before.

The New York Times reported Wednesday that the Treasury is discussing ways with Fannie Mae and Freddie Mac to bring mortgage rates down about a point to around 4.5 percent.

The Times observes that this recent activity could be a sign that lower rates could fuel even more activity, but also pointed out that only homeowners with higher credit scores will be able take advantage of them.

“For borrowers on the fringe… mortgage money may actually be available but the other terms and conditions that need to be jumped to have access to that financing make it prohibitive,” Keith Gumbinger, of HSH Associates told the Times.

For those consumers who lack access to traditional credit sources, other options for meeting short-term cash needs can include payday loans.


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According to CNNMoney.com, there are currently about 5,500 debt collection agencies in the U.S. who made over a billion calls to consumers in 2007. The website notes that consumer debt increased by $6.9 billion in September to hit a nationwide total of $2.59 trillion.

"The fact that debt doesn't go away as fast as it used to is contributing to the increase in debt collectors," collection agency owner Mark Neeb told CNNMoney.com.

The recession is driving many more consumers into debt than in recent years, but Need also told the website that collectors themselves are using more effective technologies, allowing them to catch up with debtors they may not have been able to locate in the past.

The report also noted that creditors themselves may feel more pressure to try to collect on old debts now that they are also being hit hard by the economy and the ongoing credit crunch. Even more consumers are expected to deal with collections agencies as the recession continues to unfold.

Still, options like payday loans can be of use to consumers struggling to meet short-term cash needs or to pay off an old debt.


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This week, Debt Settlement USA announced that its Consumer Debt Index had jumped nearly 30 percent since the third quarter of 2007, and more than 6.5 percent since the previous quarter.

The company calculates the Consumer Debt Index by combining other figures like the Consumer Price Index, nationwide mortgage and consumer loan delinquency rates, and consumer credit outstandings.

"The current economic crisis and America's addiction to credit has created a perfect storm in which consumer credit delinquencies will be the next crisis to hit the economy," said Jack Craven of Debt Settlement USA.

The company reported that much of the increase in its debt index was driven by the ongoing surge in mortgage delinquencies, which were up 15.7 percent in the last quarter and 87 percent over the past year. The number of past-due consumer loans is also up 16 percent in the last year.

In September, the Associated Press cited separate figures showing that as of July, card payment rates had already been falling for the past nine months. Despite the drop in payment rates, credit card use continued to grow by 4.8 percent that same month.

Consumers currently owe more than $2 trillion in combined credit card debts, and for some, options like payday loans could be useful when it comes to ensuring that late fees and other payment issues are avoided.


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New York Times financial blogger Joe Nocera ran a lengthy email this week submitted by an unnamed contact in the banking industry. The contact predicts that as layoffs continue, more and more people will find themselves unable to pay off credit card debts, which is likely to send the companies back to Congress in search of more bailout money.

However, the mystery banker puts much of the blame for this looming debt mess on the credit card industry itself.

"The banks reel in the consumer, charge interest rates higher than those charged by the mob, increase lines without the consumer asking and without their consent, and lure them into overextending," the banker is quoted as saying.

The banker goes on to tell Nocera that one of the biggest problems in the current system is that few credit card companies actually bother to verify the income of card applicants. He also suggests that Congress should act to limit unsolicited credit card offers, as well as high credit card interest rates, which he calls "piracy."

Many creditors have already begun to tighten their lending standards and cut back on unsolicited offers, although in the process this has led to less credit availability in many cases even for those with good credit. With credit cards an increasingly unstable and unattractive financial option, one can still consider payday loans and other options to meet short-term cash needs.



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This week, the Atlanta Journal-Constitution spoke with several local residents who had unexpectedly been subjected to fee increases and other costs that some might consider arbitrary.

One man, Greg Fischer, told the newspaper that he had made an online credit card payment the day it was due. However, he still saw the company impose a late fee and extend its "default" interest rate on him because he had made the payment at 4:10 p.m. - forty minutes after a daily deadline he said he had been unaware of.

Fischer had already been paying the 28.99 percent default rate for missing a payment date by two weeks earlier in the year.

"A 40-minute 'late' payment is going to cost me hundreds of dollars in interest payments if I cannot come up with the money to pay off this card in full," Fischer told the newspaper, adding that he got "absolutely nowhere" with his creditor despite repeated contacts and ten years as a customer.

Another woman, Monica Johnson, told of how her credit card company had suddenly cut her credit limit and raised her interest rates when her credit score dropped, leaving her unable to meet her minimum payments.

Consumers do have other options however, such as payday loans, when it comes to meeting short-term cash needs in a predictable fashion.


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In the ongoing credit crunch, many consumers have already noticed that credit card companies are tightening their standards for lending and making consumers fewer offers than in the past.

This week, Meredith Whitney of Oppenheimer & Co. warned in a Reuters report that such difficulties could still be in the early stages - she predicts that top credit card companies will pull back about $2 trillion in lines of credit over the next 18 months, or about a 45 percent drop in total consumer credit liquidity.

"In a country that offers hundreds of cereal and soda pop choices, the banking industry has become one that offers very few choices," the news agency quoted Whitney as saying.

The financial analyst often calls it a "dangerous and unprecedented combination" to see credit access curtailed to a significant extent at a time of heavy job losses.

Meanwhile, consumers who do get stuck with cash flow problems as credit card companies tighten their lending can still often take advantage of other options like payday loans.


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Writing in Yahoo's personal finance section, blogger Amy Fontinelle offers seven tips for avoiding economic headaches.

Among her tips are to have an emergency cash fund and to always live within your means. She points out that by having access to cash, you can avoid having to resort to other means such as tapping a home equity line of credit.

"Debt begets more debt when you can't pay it off right away," she writes.

Fontinelle also advises consumers to have more than one source of income. Many people feel that their jobs could be on shaky ground, and this would help protect against any sudden layoffs or other situations. She points out that a second income can consist of anything from consulting work to selling items on eBay.

Finally, she advises people to "have a long-term mindset with investments" and to "be honest" about their risk tolerance. This is important in the current economic climate, where the temptation to sell out of retirement funds may be heightened by the year's double-digit losses.

"Investments are supposed to provide you with a sense of financial security, not a sense of panic," writes Fontinelle.


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In a recent survey by the Consumer Federation of America, 55 percent of consumers said they were planning to "somewhat" reduce this year's holiday spending, while 27 percent said they would spend "much less than last year."

The organization noted that between 2003 and 2007, only about a third of consumers surveyed said they planned to reduce holiday spending.

"More (consumers) say they plan to cut back their spending this year than at any time in the nine years we have been doing this survey. As a result, we may see an actual decline in holiday spending for the first time in many years," said economist Bill Hampel.

The survey found that women (62 percent) were more likely than men (48 percent) to be planning spending cutbacks. Many of the consumers also said that they were at least somewhat concerned about meeting their monthly debt payments this year, with 23 percent saying they were "very concerned."

The CFA teamed up with the Credit Union National Association to offer some tips on saving money this season.

Some of the tips included keeping to a budget and shopping list, comparison shopping, cutting costs with potluck meals and drawing names for gifts, and paying in cash instead of credit. Some consumers determined to avoid using their credit cards this season can also explore options like short-term loans to meet their holiday needs.


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Leslie McFadden of bankrate.com writes in a recent CNBC column that even if customers can save a quick 20 percent on the purchase they are making that day, "a new account impacts your credit score and opens up another avenue to debt."

Still, there can be some positives that come with store credit cards. For example, repeat customers can often receive discounts and other rewards from a given store.

However, Fatima Mehdikarimi of ShoppingQueen.com reminds McFadden that oftentimes, customers don't need a store card to simply join a mailing list and receive discount coupons and special sale notices anyhow.

Another positive about store credit cards is that they tend to give people an opportunity to build up their credit history, especially in the case of co-branded cards that can be used anywhere and which occasional offer perks like frequent flier miles.

One of the biggest drawbacks cited with store credit cards is their high interest rates, which are generally well into the 20 percent range. McFadden also urges consumers to be fully aware of the effect opening a new account, even one with a low credit limit, can have on your credit rating.


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According to a report by the Associated Press, economics is becoming a more interesting subject to many young people whose families are experiencing debt problems and the impact of rising prices first hand.

"Now we can actually see the examples while they happen, instead of relying on history," New York University junior George Schwartz told the news provider. "It's been the most engaging class ever."

Aristedes Lourdas, a teacher at the High School of Economics & Finance in New York, said students are realizing that what happens on Wall Street can have a dramatic impact on their own lives.

For example, some students are worried that they may not be able to afford to go to college. According to a recent report in the Los Angeles Times, graduating seniors had average debts of $20,098 last year, up six percent on 2006.


]]>http://www.welcomefinancial.com/news/archive/Economic-crisis-sparking-student-interest-in-finan-515.aspx
A recent Associated Press report observes that major retailers have seen a noticeable drop in the number of credit transactions they process, in favor of cash and debit purchases.

In one example, credit card transactions at Wal-Mart have reportedly fallen 7.4 percent in the current fiscal year after posting double-digit gains over the last three years. The report also noted that retailers are seeing a trend where customers tend to wait until payday to make purchases.

Along with spending less on their credit cards, consumers are also facing tighter standards and higher costs when they apply for new cards, and are receiving fewer solicitations from credit card companies in general.

"I think this is a new way of life. I like to be able to know we paid for something. I hate monthly payments when you use a credit card," Robert Smith of Illinois told the AP.

Looking ahead, it still remains to be seen if consumers who grew accustomed to carrying large debt and getting easy credit will go back to their former spending habits when the economy improves.


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Secretary of Education Margaret Spellings announced recently that her department will purchase up to $6.5 billion in student loans from the 2007-2008 academic year.

The ongoing credit crunch has shown signs of extending into more consumer-oriented areas like automobiles and student loans, creating an additional burden at a time when many are also facing layoffs and uncertainty.

Along with finding access to fewer loans, many students have been paying higher interest for the ones they can get.

"I am using the authority granted by Congress to protect students and their families during the unprecedented current market conditions and taking necessary steps to help ensure continued, successful disbursements of student loans," said Spellings last week.

The secretary added that this will be a short-term plan for her department, which will last no longer than February 28, 2009. The department will purchase loans at 97 percent of their principal along with any outstanding interest, at a rate of about $500 million each week.


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According to professor Sheila McNamee of the University of New Hampshire, the current economic climate is an opportunity to "take stock" and talk to loved ones about their own gift-giving plans for the coming holidays.

"The success or happiness of the holiday season does not need to be measured by the amount of money you spend but should be measured by the quality of time and personal commitment we offer," said McNamee.

McNamee also says that placing a greater emphasis on well thought-out gifts that will be more meaningful to their recipients even if they don't have an expensive "wow" factor. A "green" approach to gift-giving can also give shoppers a chance to be resourceful.

For those who have holiday expenses to meet even after they cut back, one option could be a short-term loan.

"We have the chance now to reclaim the holidays and return to a semblance of what they used to be like before consumerism exploded," said McNamee.


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Last week in a speech before the Executives Club of Chicago, Bloomberg News quoted Bank of America CEO Ken Lewis as predicting record defaults on credit card payments next year because of higher unemployment.

He noted that along with the current poor economy, consumer and government debt has grown faster than the gross domestic product at a four to one pace in recent years.

"The times, to be blunt, are not good," Lewis was quoted as saying in the Charlotte Observer. "What started last year as a crisis in the subprime mortgage markets became a global credit crisis, and now has become a global recession."

In his remarks, Lewis called on banks to reclaim the role they once had in trying to teach Americans how to save money and live within their means.

According to a Dow Jones report, the CEO found at least one silver lining to the ongoing financial mess, observing that financial institutions are currently being reminded that they play a "supporting role" in the economy, and not a lead one.


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Richard Hobbie, executive director of the National Association of State Workforce Agencies, told USA Today that rising unemployment is putting a strain on benefit funds.

Indeed, figures out this week revealed that new claims for unemployment benefits recently reached a 16-year high.

Mr Hobbie said that in order to keep benefit funds solvent, some states may need to impose higher taxes on employers and reduce benefits.

Meanwhile, Congress has announced plans to extend jobless benefits by seven weeks - or longer in states with high levels of unemployment.

According to USA Today, around 1.1 million people would exhaust their unemployment insurance by the end of the year if the plans were not implemented.

The US unemployment rate currently stands at 6.5 per cent following months of job losses, which have hit many of those already facing high levels of debt.


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According to data from the Federal Highway Administration, the number of miles logged by motorists fell by 4.4 per cent in September.

Experts claim the figures show that consumers - many of whom already face debt problems - are responding to the recession by cutting back.

Fred Milch, division planner for the East Central Florida Regional Planning Council, said: "With the unemployment rate going up, people are just not driving. They just don't have the money to go on leisure trips and don't have money to go shopping."

Average gas prices recently fell below $2 a gallon for the first time since March 2005, according to figures from the Energy Department and AAA. In July they reached a peak of $4 a gallon.

Yet driving habits have not changed in recent months and consumers are still choosing to avoid unnecessary journeys, perhaps because they have realized the benefits of having extra money available to pay off debt and meet other daily living costs.


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The two companies said around 16,000 mortgage borrowers who are facing foreclosure between now and January 9th.

Proceedings will be suspended until the new year, allowing homeowners to speak with advisors and renegotiate the terms of their loans.

It is hoped that the arrangements will allow thousands of customers experiencing severe problems with mortgage debt to stay in their homes.

David Moffett, chief executive of Freddie Mac, said the lender is set to help three in five borrowers avoid foreclosure this year.

He said the new announcement "builds on this momentum and provides a new measure of certainty to many of these families during the holidays."

Earlier this month, Fannie Mae and Freddie Mac announced details of a mortgage support package that would ensure struggling borrowers spend no more than 38 per cent of their income on mortgage repayments.


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According to John Donahoe, the chief executive of online auction house eBay, consumers have an average of $3,200 worth of items sitting at home that they could sell.

He told USA Today that 1.3 million people currently make all of their money or take a secondary income from selling goods through the website.

And he predicts that over the coming months, as the financial crisis takes hold, the number of people using eBay to make money will rise further.

"People become more entrepreneurial in tough economic times," he explained.

In the UK, one woman has gone to extreme lengths to make money by offering eBay users the chance to bid on her name.

The highest bidder will be able to formally rename 37-year-old Eileen De Bont with a moniker of their choosing.

Another way of getting access to money in financial emergencies is to make use of pay day loans. Consumers can borrow small amounts to tide them over until their next pay check arrives.


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They show that applications rose to a seasonally adjusted 542,000 in the week ending November 15th, up from a revised figure of 515,000 the previous week.

This is the highest number of new jobless claims since July 1992 when the economy was recovering from the last recession.

Concerns have been voiced over the state of the labor market for some time now as rising unemployment puts extra pressures on those already struggling with debt.

Cary Leahey, an economist at Decision Economics in New York, told Reuters: "We're probably facing another payroll employment report showing November job losses in the vicinity of 200,000."

According to the Associated Press, companies including Citigroup, Union Pacific and Sun Microsystems have all announced layoffs recently.

The US unemployment rate currently stands at 6.5 per cent.


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Indeed, data from comScore shows that online spending grew at its slowest pace on record last month as consumers reined in their spending, the Associated Press reports.

As well as contending with higher basic living costs, many are also facing large amounts of debt and are being forced to reduce their expenditure.

Online spending grew by just one per cent in October compared to the same month last year, which is the slowest rate of growth since 2001 when comScore began tracking.

The figures echo recent announcements from online retailers such as Blue Nile, Amazon and Saks, which have all experienced a slump in sales.

However, they stand in contrast to a recent survey by Deloitte, which revealed that 71 per cent of consumers plan to spend some or all of their holiday budgets online this year.

This may suggest that while more people are going online, they are perhaps cutting back on the overall amount they are spending on non-essential items.


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This is the sharpest rate of decline on record and is seen by many analysts as confirmation that the US economy is weakening.

As well as falling gas prices, the cost of food and energy has also been coming down, resulting in a larger than expected overall drop in October.

For those struggling to manage their debt, the reduction is likely to come as good news since it may give the Federal Reserve scope to cut interest rates even further.

Ian Shepherdson, chief US economist with High Frequency Economics, said November's figure is likely to show further declines since core prices are still falling.

"This report clearly reflects the crunch in discretionary consumers' spending, which is likely to persist for the foreseeable future," he remarked.

According to government data, consumer spending slipped by 0.3 per cent in September.


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According to the National Retail Federation's (NRF) Holiday Consumer Intentions and Actions Survey, just 2.2 per cent of consumers have finished their Christmas shopping.

In contrast, some 72 per cent of people questioned have only ten per cent or less of their Christmas gifts so far this year.

Tracy Mullin, president and chief executive of the NRF, said the research suggests consumers are holding out for discounts as they look to make savings.

"Though many companies have already been featuring substantial sales and discounts, retailers may still have a few tricks up their sleeves to attract and entice holiday shoppers," she remarked.

The survey also shows that just 31.5 per cent of consumers plan to take on further debt by using credit cards to make festive purchases this year.

According to a report by Reuters, Wal-Mart has seen a drop in the number of customers using credit cards in its stores.


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According to a report by Reuters, a number of retailers, including Wal-Mart, have seen a fall in the number of credit card transactions being carried out in their stores.

"Customers have maxed out on their credit limits," Eduardo Castro-Wright, head of Wal-Mart's US stores, said at a recent conference.

Reuters also cites research by America's Research Group, which shows that 60 per cent of US consumers plan to use their credit cards less this holiday season than they have done in previous years.

The news provider claims that tighter credit conditions have forced many citizens to cut back their spending on plastic.

However, it adds that the figures also suggest consumers are becoming more concerned about their ability to survive the economic downturn if they are saddled with debt.

Meanwhile, Innovest Strategic Value Advisors has predicted that credit card providers could be forced to write off as much as $41 billion worth of bad debt this year as consumers struggle to keep up with their repayments, the Register-Guard reports.


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According to USA Today, companies are launching various offers and some are even giving away free turkeys to entice shoppers into their stores.

US consumers have been hit hard by mounting debt and increases in the cost of everyday essentials and are tightening their belts ahead of the holiday season.

In a bid to encourage them to open up their wallets, retailers are using coupons, introducing numerous price cuts and resorting to free giveaways.

Harry Balzer, a food expert at NPD Group, told USA Today that there is likely to be an increase in the number of families and friends eating together this Thanksgiving to cut costs.

Meanwhile, a new survey by Deloitte reveals that 71 per cent of US citizens plan to do some or all of their holiday shopping online this year to save money.

Consumers struggling to make Thanksgiving special this year could consider pay day loans to tide them over for a short period of time.


]]>http://www.welcomefinancial.com/news/archive/Food-retailers-slashing-prices-as-consumers-tighte-840.aspx
According to the latest monthly report by RealtyTrac, foreclosure filings were up five per cent in October compared to September.

Foreclosures totaled 279,561 for the month, which is an increase of 25 per cent on October last year, the report shows.

Thanks to a state law requiring lenders to contact homeowners and explore alternatives to repossession, California's foreclosure numbers were down on the month.

However, this was not enough to offset the overall increase, according to RealtyTrac senior vice-president Rick Sharga.

"An economic downturn is traditionally a precursor to foreclosures, even in a normal foreclosure cycle. This is not a normal foreclosure cycle by any means," he told Reuters.

The findings come after the US government announced plans of a support package to help homeowners struggling to pay their mortgage debt.

Help will be available to borrowers who are at least three months in arrears to ensure they are spending no more than 38 per cent of their income on housing.


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Fannie Mae and Freddie Mac - the mortgage lenders controlled by the state - have agreed to modify the loans of those falling into arrears to prevent them from losing their homes.

Interest rates will be cut to ensure that borrowers are spending no more than 38 per cent of their income on mortgage repayments.

Some loans will be extended from 30 years to 40 years, therefore reducing the amount that is owed each month.

It is hoped that the deal will help to halt the rapid increase in foreclosures that has been witnessed in many parts of the country.

However, only those who are at least three months in arrears and who owe more than 90 percent of the value of their home will qualify.

Mortgage lenders repossessed 84,286 properties in October, according to the latest US Foreclosure Index from Foreclosures.com.


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In a recent report, the firm said the difficulties in the mortgage markets are symptomatic of a deeper problem that stems from consumer reliance on debt, the Register-Guard reports.

"For nearly a decade, Americans have been taking on more debt while their savings and real wages have declined. Mortgages were the first victim of this credit deterioration. We believe credit cards will be next," the document read.

Innovest predicts that credit card providers will be forced to write off $41 billion worth of bad debts this year, followed by a further $96 billion in 2009.

Meanwhile, it has been reported that banks and consumer groups are urging the government to make it financially feasible for them to forgive up to 40 per cent of the debt owed by some credit card customers.


]]>http://www.welcomefinancial.com/news/archive/Credit-cards-'will-be-the-next-victims-of-the-cris-783.aspx
It shows that 71 per cent of US citizens intend to spend at least some of their Christmas budgets on the internet this year, while more than one in five people plan to buy all their holiday goods online.

This makes the internet the most popular medium for Christmas shopping after department stores, Deloitte found.

When giving their reasons for shopping online instead of in stores, 36 per cent of consumers said they would do so to save money on gas.

A savvy 52 per cent said they will be taking advantage of free shipping offers from online retailers as they look to limit the impact of the holiday season on their wallets.

Indeed, many Americans are struggling with high levels of debt and will be looking to save as much money as they can this Christmas, especially as the economy heads into a recession.

The latest government figures show that consumer spending fell by 0.3 per cent in September.


]]>http://www.welcomefinancial.com/news/archive/US-consumers-to-shop-online-this-Christmas-763.aspx
It shows that the vast majority of people believe the country is currently in a recession, while 54 per cent expect it to last longer than a year.

Consumers aged 25 to 29 are the least optimistic about the country's economic prospects. Indeed, just six per cent said they believe the recession will be over within 12 months.

"Younger consumers grew up in an era of prosperity and have never really known economic challenges to this extent," explained James Russo, vice president of marketing at the Nielsen Company.

The survey also shows that men are more optimistic than women, both in terms of whether the economy currently is in recession and how long it will last.

According to the Conference Board, consumer confidence plummeted last month amid fears over job security, personal finances and debt.


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Market Watch reported that in September, total seasonally-adjusted consumer debt increased to $2.59 trillion - an increase of $6.86 billion.

And while non-resolving credit - student loans, auto loans and personal loans - had fallen by 4.9 percent in August, it increased by 4.4 percent in September, reaching $1.62 trillion.

Meanwhile, the San Antonio Express reported earlier this week that some US credit card customers are having trouble staying on top of their credit card debts.

The newspaper asserted that the largest credit card issuers in the nation - the Bank of America, Citigroup, Discover, American Express and Capital One - have reported an increase in late payments and closed accounts because customers cannot afford to pay.

People struggling with credit card debt may wish to consider a pay day loan to help consolidate what they owe.

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A total of 106,266 bankruptcies were filed by US consumers in October - a figure up 20 per cent from September and a 40 per cent increase compared with the same month last year.

"October's sharp spike in new consumer bankruptcies confirms the severe financial stress on household budgets caused by high debts, flat incomes, and declining home values," said ABI executive director Samuel Gerdano, according to a Reuters report.

He added that total bankruptcy filings have reached over 100,000 for the first time in one month since the US Bankruptcy Abuse Prevention and Consumer Protection Act came into effect in 2005.

Meanwhile, official figures from the US Commerce Department revealed that in September 2008 consumer spending fell to its lowest amount in four years.


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Jobless claims rose by 12,000 to a seasonally adjusted 3.84 million, according to the Labor Department. This is the highest figures since 1983.

The number of people filing new claims was higher than expected at 481,000 in the week beginning November 1st, the data shows.

Increasing unemployment is likely to put a strain on numerous American families, many of whom are already struggling to manage their debt.

Bob Brusca, an economist at FAO Economics, told CNN Money: "The labor market is not looking good at all."

US employers have been making job cuts for nine consecutive months now.

Meanwhile, a report from the American Bankruptcy Institute has revealed that consumer bankruptcies increased by 40 per cent last month as a result of high debt levels and other economic pressures.


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The Democratic nominee was declared victorious after exceeding the 270 electoral college votes needed to defeat Republican John McCain.

His acceptance speech - in which he insisted a "new dawn of American leadership" was at hand - was met with cheers and rapturous applause.

But economists have warned that once the honeymoon period is over, Obama will come up against some difficult decisions as the US economy heads into recession.

As well as falling economic growth, he will also have to deal with mounting personal debt and home foreclosures, as well as rising unemployment.

Prior to his election, Obama pledged to create millions of jobs through investment in renewable energy and infrastructure improvements.

He also promised to implement a $60 billion stimulus package, part of which would be used to help homeowners struggling with debt to repay their mortgages.


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The central bank said mortgages, credit cards and personal loans are all becoming more difficult to obtain as the economic crisis continues, the Associated Press reports.

Almost 60 per cent of banks told the Fed they had introduced stricter lending criteria on credit cards, while 70 per cent said they had tightened lending standards for mortgages.

Consumers struggling to secure credit under such conditions could find that pay day loans are a useful alternative.

They can apply for such loans quickly over the internet, borrowing small amounts over a short period of time to help them deal with financial emergencies.

Pay day loans are repaid once a customer receives his or her next pay check.

Meanwhile, United Press International reports that 30 US states are now in a recession or heading into one, according to Moody's Economy.com.


]]>http://www.welcomefinancial.com/news/archive/Consumers-coming-up-against-tighter-loan-standards-953.aspx
According to government data, spending slipped by 0.3 per cent in September amid fears of a looming recession in the country.

The drop was the largest since June 2004 and follows flat readings in July and August.

Consumer spending accounts for two-thirds of economic activity in the US. The latest figures have therefore added to fears that a recession is imminent.

Indeed, gross domestic product declined at an annual rate of 0.3 per cent during the third quarter of the year, official figures show.

The common definition of a recession is two consecutive quarters of negative growth.

In response to the gloomy data, the Federal Reserve cut interest rates to one per cent, possibly brining some relief to those struggling with debt.

However, whether this will encourage consumers to head back to the shops and start spending again remains unclear.

A survey carried out earlier this month by AlixPartners revealed that 64 per cent of US consumers intend to spend less this Christmas.


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Their request comes as defaults on credit card debt continue to rise as consumers face increasing financial pressures.

According to reports, as many as 50,000 consumers would benefit from a program of forgiveness if it was implemented.

Under the proposals, banks would write off up to 40 per cent of the debt owed by some of their most financially-impaired credit card customers.

Commenting on the calls, Susan Keating, president of the National Foundation for Credit Counseling, said: "There's obviously a financial benefit to the financial institutions to step up to the plate right now."

According to figures from the Federal Reserve, US consumers have accumulated $900 worth of credit card debt.

Meanwhile, a survey by First Command has revealed that people are paying off more of their short-term debt as well as increasing their savings.


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According to a study by comScore, online credit card applications submitted at the top ten credit card issuer sites were down six per cent over the year.

The authors of the study suggest tighter credit conditions may be responsible for the decline as consumers are finding it increasingly difficult to obtain credit.

Indeed, the economic crisis is causing many banks to become more cautious about who they lend to, which is restricting access to loans and credit cards for many consumers.

Fortunately, pay day loans could provide an answer for those in need of short-term credit to cope with financial emergencies.

According to Check into Cash, pay day loans can act as a viable alternative to more traditional forms of lending and can help to ease the strain on household budgets.


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The news provider spoke to a number of luxury retailers and finance experts and found that cost cutting is not simply an exercise being carried out by ordinary households.

For example, wealthy women are having botox injections instead of expensive face lifts, while affluent holidaymakers are downgrading to cheaper accommodation.

"Those who usually rent Christmas villas are more likely to stay in hotels instead," explained David Arnold, publisher of the luxury lifestyle magazine the Robb Report.

USA Today also cites a survey carried out by Elite Traveler magazine, which is handed out at yacht clubs and on private jets. It found that, until next year at least, over 90 per cent of its readers plan to spend the same or less then usual.

"There is no luxury category that is untouched by this recession," insisted Milton Pedraza of the Luxury Institute.

Meanwhile, figures from the Administrative Office of the US Courts show that almost one million individuals filed for bankruptcy in the 12 months to June.


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According to figures from the Administrative Office of the US Courts, personal bankruptcies filed in federal courts totaled 934,009 during the period, up from 727,167 during the previous 12 months, CNN Money reports.

Commenting on the figures, Professor Jack Williams, a scholar at the American Banking Institute, said: "I expect bankruptcies in 2008 to exceed 1.2 million filings."

Beyond this year, personal bankruptcies could rise by a further 15 to 20 per cent as rising prices put pressure on household budgets, he added.

The increase comes despite the passing of a bill in 2005 aimed at reducing the number of consumers being declared insolvent.

Meanwhile, a new survey by First Command shows that in the three months to September, US consumers were paying off more of their debt and making bigger contributions to their savings.


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In a post-meeting statement, the group said the move was prompted by falls in consumer spending as rising prices and debt repayments squeeze family finances.

"The pace of economic activity appears to have slowed markedly, owing importantly to a decline in consumer expenditures," the statement read.

Consumers struggling to pay off their arrears are likely to welcome the move, which could result in lower repayments.

It seems economists saw the rate cut coming. USA Today questioned a number of experts earlier this week and 82 per cent said they expected to see a reduction.

The Federal Reserve's move is expected to be followed by similar base rate cuts in the UK and Europe as economies across the Atlantic suffer the effects of the financial downturn.


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It shows that short-term savings for an average family rose by 29 per cent in the three months to September to reach $901.

At the same time payments on short-term debt were up eight per cent, from $938 in June to $1,010 last month.

Commenting on the findings, Scott Spiker, chief executive of First Command, said they show that consumers are "buttoning-down during tough economic times".

"Our research shows a significant downturn in consumer sentiment on feelings of financial security, optimism and being financially stretched on a month-to-month basis," he remarked.

The survey also shows that 54 per cent of consumers are concerned about the cost of everyday goods, while 40 per cent are worried about personal debt.

According to the Conference Board, consumer confidence fell in September to its lowest level since the organization's index began in 1967.


]]>http://www.welcomefinancial.com/news/archive/Consumers-boost-savings-and-pay-off-debt-865.aspx
The Conference Board said its consumer confidence index plummeted in October amid increasing anxiety over job security and future financial prospects.

In September the index stood at 61.4, but this month it fell to just 38.0 - the lowest reading since the index began in 1967.

Lynn Franco, the Conference Board's chief economist, said: "The impact of the financial crisis over the last several weeks has clearly taken a toll on consumers' confidence."

October's decline follows three consecutive months of slight gains, which according to Ms Franco does not bode well for retailers this holiday season.

Indeed, a survey conducted earlier this month by the business advisory firm AlixPartners shows that 64 per cent of US consumers plan to spend less on Christmas gifts this year.


]]>http://www.welcomefinancial.com/news/archive/Consumer-confidence-hits-record-low-770.aspx
According to the Norton School of Family and Consumer Sciences, at least five per cent of freshman at the University of Arizona obtained a pay day loan last year, Arizona Republic reports.

This is almost double the number of students making use of such loans a year ago, according to a similar survey which questioned university students of all ages.

Pay day loans offer access to credit on a short-term basis. The amounts borrowed typically range from between $100 and $1500 and are repaid once the borrower receives his or her next pay check.

KLAS-TV reported recently that pay day lenders are seeing an increase in business as the credit crunch puts a strain on consumers' personal finances.

Meanwhile, Wal-Mart said it had witnessed a shift in shoppers' buying habits, claiming many people are now living from pay check to pay check and purchasing essential goods at the beginning of the month when they have more cash.


]]>http://www.welcomefinancial.com/news/archive/Students-turn-to-pay-day-loans-479.aspx
Some 82 per cent of the 45 experts questioned said they expect to see a reduction in rates following the two-day meeting on Wednesday.

Of these, 38 per cent anticipate a quarter-point cut, but 44 per cent believe the Fed will implement a half-point cut, bringing rates to just one per cent.

David Berson, chief economist at the PMI Group, is in the latter camp. He told USA Today: "The financial crisis has finally pushed the economy over into a real recession."

Another large cut in interest rates could bring some relief to consumers struggling with debt repayments, helping to ease the pressure on their finances.

The Federal Reserve moved to cut rates by 0.5 per cent on October 8th in a bid to minimize the impact of the global financial crisis.

But chairman Ben Bernanke said the move had been "overwhelmed" by instability in the financial markets.


]]>http://www.welcomefinancial.com/news/archive/Rate-cut-on-the-horizon,-survey-suggests-699.aspx
The former Federal Reserve chairman told a congressional panel that US consumers - many of whom are struggling with debt - are afraid for the security of their jobs and their savings, as well as facing a rapid reduction in the availability of loans and mortgages.

"Given the financial damage to date, I cannot see how we can avoid a significant rise in layoffs and unemployment," he remarked. "The crisis … has morphed from one gripped by liquidity restraints to one in which fears of insolvency are now paramount."

Mr Greenspan suggested that the downturn will only come to an end when movements in property prices stabilize, which may not happen for many months.

The Associated Press reported earlier this month that experts were suggesting the "easy" days of obtaining credit were over.

Consumers struggling to access credit in the form of personal loans from banks may wish to consider pay day loans as an alternative arrangement.


]]>http://www.welcomefinancial.com/news/archive/Credit-tsunami-'will-have-severe-impact'-says-Gree-377.aspx
With the holiday shopping season approaching, a number of retailers offering layaway have seen increasing demand for the schemes among consumers.

Layaway is a payment method that allows consumers to keep their purchases in storage and pay for them in installments, receiving the items only once the balance is paid off.

Kmart has launched an advertising campaign to promote its layaway service ahead of Christmas, confident that consumers will take up its offer.

Mark Snyder, chief marketing officer at the department store chain, said: "It is all about our shoppers being able to put the hottest gifts that their family wants on layaway. They can get them early and still get them out for Christmas."

Meanwhile, Mal-Mart said it has witnessed a shift in consumer shopping habits, claiming that increasing numbers of people are living from pay check to pay check and buying essentials at the beginning of the month.


]]>http://www.welcomefinancial.com/news/archive/Layaway-purchasing-'making-a-comeback'-863.aspx
This observation was made by Wal-Mart, which claims to have witnessed a surge in sales of items such as baby formula during the first weeks of every month.

At the same time, credit card use is waning as shoppers adjust their spending habits to cope with the financial downturn and its effect on their wallets.

Eduardo Castro-Wright, president and chief executive of Wal-Mart's US operations, described the shift in spending behavior as "disturbing".

"Clearly, most of our customers have maxed out," the Pasadena Star-News quotes.

A survey carried out by online market intelligence firm BIGresearch revealed that many cash-strapped consumers are turning to haggling as a means of securing discounts on their purchases.

Consumers struggling to stick to their monthly budget as the result of a financial emergency may find pay day loans a viable solution.


]]>http://www.welcomefinancial.com/news/archive/US-consumers-living-'pay-check-to-pay-check'-854.aspx
This is the conclusion of a new survey by Nielsen Claritas, which shows that 84 per cent of US citizens are as confident in their primary bank as they were six months ago.

Furthermore, 95 per cent believe the financial assets of their bank to be relatively safe.

This is in spite of widespread unease over the prospects for the US economy, with 70 per cent of those questioned remaining concerned about the economic crisis.

Jane Crossan, vice-president of Nielsen Claritas, said: "With the recent turbulence of the financial markets, it is not surprising that the public is both concerned and pessimistic about the overall economy, but when it comes to their personal situation they have more confidence in their own financial institutions than you might expect."

Meanwhile, an index released by Reuters and the University of Michigan shows that consumer confidence as a whole has fallen sharply this month as financial market turbulence continues and people grapple with debt.


]]>http://www.welcomefinancial.com/news/archive/US-consumers-express-confidence-in-their-banks-609.aspx
According to a survey carried out by online market intelligence firm BIGresearch in April, 50 per cent of consumers have started to haggle for goods and services.

Among the items haggled for are auto repairs, consumer electronics and home appliances, the research shows.

BIGresearch suggests the growth of internet price comparison websites has made consumers more aware of price disparities and therefore more determined to seek out bargains and discounts.

Marc Cook, general manager of Abt Electronics in Glenview, said his store is one of many that is willing to negotiate with consumers.

"If people have a reasonable request when it comes to pricing, we would rather have them leave satisfied than spend money on gas going elsewhere," he told the Chicago Tribune.

Figures show that US consumer spending remained flat in August as household budgets continued to be squeezed.


]]>http://www.welcomefinancial.com/news/archive/US-consumers-'haggling-to-save-money'-670.aspx
According to USA Today, the democratic candidate wants to reduce taxes for low and middle income families while increasing corporate tax rates and scaling back tax cuts for wealthy citizens.

Meanwhile, the republican candidate has promised to implement the tax policies announced by the Bush administration and double the personal exemption taxpayers are entitled to claim.

Both have said they would temporarily shelve taxes on unemployment benefits.

The announcements come as US consumer confidence is falling amid volatile stock markets and rising unemployment.

Consumer spending has also slumped as families save their hard-earned cash to pay off debt and cope with increased living expenses.

"Things are pretty awful in the economy and that should make itself felt through weaker consumer spending,'' Michael Feroli, an economist at JPMorgan Chase, told Bloomberg.


]]>http://www.welcomefinancial.com/news/archive/Presidential-candidates-pledge-tax-cuts-736.aspx
In what may be bad news for those struggling with debt, the Federal Reserve chairman said the central bank is doing everything it can to relieve problems in the banking industry and bring an end to volatility in the financial markets.

However, he warned: "Even if they stabilize, as we hope they will, broader economic recovery will not happen right away. Economic activity had been decelerating even before the recent intensification of the crisis."

Experts have applied similar caution to the financial meltdown in the UK. Jonathan Loynes, the chief European economist at Capital Economics, warned: "The economic crisis is about much more than just the state of the banks. The financial crisis might start to ease but the economic crisis has got a lot further to go."

Dean Hillier, a partner at Kearney, told the International Herald Tribune recently that he believes this year's holiday shopping season "could quite frankly be one of the worst we've seen in 25 years".


]]>http://www.welcomefinancial.com/news/archive/Bernanke-warns-of-slow-economic-recovery-636.aspx
USA Today reports that former and current customers of firms such as Washington Mutual and JP Morgan Chase are being targeted by phishing emails, which attempt to steal user information by using the proposed merger between the two companies as a backdrop.

According to Netcraft, similar phishing attempts occurred when Citigroup showed interest in purchasing Wachovia last month.

Andre Gold, ING's ex-chief of information security, commented: "It's a new spin on old tactics."

The cyber crime attempts are yet another problem facing those in debt, who are already struggling to obtain credit as easily as they used to because of the financial squeeze.

According to Xinhua, analysts have predicted that Americans will cut their spending in the third quarter of 2008 for the first time in 17 years.


]]>http://www.welcomefinancial.com/news/archive/Cybercriminals-'preying-on-debt-sufferers'-629.aspx
But even when the financial crisis comes to an end, some experts are predicting that the credit system will not return to the "easy" days experienced before the credit crunch began, the Associated Press reports.

Senior analyst Greg McBride of Bankrate explained that attitudes are beginning to change and that the current tightness in the market is "a wake-up call to anybody who was attempting to borrow their way to prosperity".

"I think we're undergoing a fundamental shift from living on borrowed money to one where living within your means," he added.

Xinhua reported Federal Reserve figures from last week that demonstrated US consumer credit had fallen by 3.7 percent - the first drop in ten years.

Pay day loans are one alternative for consumer struggling to get hold of credit via traditional means. They provide a short-term solution to financial crises and are paid back immediately after consumers receive their next pay check.


]]>http://www.welcomefinancial.com/news/archive/Consumers-facing-tighter-credit-conditions-619.aspx
According to Reuters, Energy Department figures show a 33.3 cents fall in pump prices on average, with gas now costing $3.15 a gallon.

On Tuesday, the price of oil fell to $79 a barrel - a long way away from the $140 price tag experienced over the summer.

And consumers struggling with debt may benefit from this at gas stations for some time to come, with experts predicting that oil prices could stabilize in the $75 to $85 range.

Mike Zambreski of brokerage OptionsXpress remarked: "We may be seeing the start of some stability. I think the market is kind of tired of all the volatility."

The Gulf Coast has the lowest regional price for gasoline, 16 cents below the national average at $2.99.

This figure is down 45 cents on a year ago.


]]>http://www.welcomefinancial.com/news/archive/Falling-gasoline-prices-bring-relief-to-consumers-604.aspx
Millan Mulraine told CEP News that the report was much worse than the markets had been anticipating and came as a major blow to the economy.

"On the whole, the strains on US consumers are beginning to show and this report is yet another indication that consumers are beginning to retrench their spending," he remarked.

He pointed to weak domestic growth, tighter credit conditions and a deteriorating labor market as issues consumers are having to deal with.

Meanwhile, the Associated Press reports that according to experts, the "easy" days of credit are over and consumers are likely to find securing loans much more difficult in the future.

Anyone struggling to obtain credit could find the answer in pay day loans, which they can apply for online and which offer a short-term solution to financial emergencies.


]]>http://www.welcomefinancial.com/news/archive/Retail-sales-report-'simply-disturbing'-claims-eco-538.aspx
The news provider reports that 73 per cent of consumers believe the economy is in a "poor" state and 84 per cent believe the situation will deteriorate further.

Furthermore, two-thirds of those questioned say their personal financial situation and their debt levels have taken a hit as a result of stock market falls and troubles in the housing market.

Despite promises from both presidential candidates to rescue the US economy, only 44 per cent of respondents have confidence in Barack Obama to steer the country through the troubles and just 31 per cent believe John McCain has the ability to do so.

Meanwhile, in a survey by Reuters and the University of Michigan, 57 per cent of consumers said they had lost confidence in the Federal Reserve over the last five years.


]]>http://www.welcomefinancial.com/news/archive/US-citizens-expect-further-economic-woes-342.aspx
According to a survey by the Nielsen Company, 35 per cent of those polled will be reining in their spending this holiday shopping season. Just six per cent of consumers expect to spend more.

It is not just those on low incomes that are cutting back. The research shows that 32 per cent of affluent consumers will be tightening the purse strings this year.

"Clearly, consumers across all income levels have some trepidation about holiday spending," said Todd Hale, senior vice-president at Consumer & Shopper Insights.

Department stores and retailers selling electrical goods could see the biggest drop in Christmas sales, with 28 per cent of those polled planning to spend less in such stores.

Consumers struggling to purchase gifts for friends and family members this Christmas may consider pay day loans, which will provide them with the funds they need until they receive their next pay check and are able to pay back the loan.

Meanwhile, research released last month by Mediamark Research & Intelligence reveals that 62 per cent of US consumers begin their holiday shopping before Thanksgiving.


]]>http://www.welcomefinancial.com/news/archive/US-consumers-to-spend-less-this-Christmas-330.aspx
As many households struggle with debt, they are spending less on clothes.

Abercrombie & Fitch reported a fall in like-for-like sales of 14 per cent last month.

Gap, JC Penney and Chico were also among retailers to report a September slump.

Gap had an 11 per cent same-store sales drop, while JC Penney was down by 12.4 per cent.

Even firms aimed at people on a budget, such as Ross Stores and TJX, owner of TJ Maxx, said sales had been slowing down.

Dean Hillier, partner and retail specialist at management consultancy company AT Kearney, has spoken bleakly about the prospects for this year's festive period.

He told iht.com that this Christmas' shopping season "could quite frankly be one of the worst we've seen in 25 years".

Mr Kearney predicted that consumers would spend money on movie tickets and board games rather than vacations and expensive TVs, adding that the situation was like an echo of the 1980s.


]]>http://www.welcomefinancial.com/news/archive/September-sales-drop-for-clothing-chains-331.aspx
According to KTNV, Las Vegas residents are finding it increasingly difficult to pay their household bills and are seeking fast access to credit.

Pay day loans are short-term loans which are designed to tide consumers over until the arrival of their next pay check in the event of a financial emergency.

Debt counselors have warned consumers not to become too reliant on pay day loans.

But many experts point out that, as with any forms of credit, they can provide a financial lifeline if consumers are able to make repayments on time.

Tan Westmoreland, regional manager of AmeriCash Loans, said recently that pay day loans can be "a means of survival when hardship strikes".

Writing in the Illinois newspaper the State Journal-Register, he said pay day lenders often work with consumers to make sure they are able to manage their debt.


]]>http://www.welcomefinancial.com/news/archive/Las-Vegas-residents-'turning-to-pay-day-loans'-989.aspx
According to a number of major retailers who reported their figures this week, September was another weak month for consumer spending.

Many - including Target, JC Penny, Kohl's, Saks and Nordstrom - are now expecting a difficult holiday season and have cut their outlooks for the coming months in anticipation of subdued activity.

Dean Hillier, a partner and a retail specialist with AT Kearney, told the International Herald Tribune that this year's Christmas shopping season "could quite frankly be one of the worst we've seen in 25 years".

Even discount retailers are struggling as consumers tighten their belts. While Wal-Mart and Costco both reported solid sales, their results fell below Wall Street estimates.

A recent poll conducted by USA Today revealed that 33 per cent of consumers believe the economy is heading into a period of depression.


]]>http://www.welcomefinancial.com/news/archive/Consumers-cutting-back-on-luxuries-939.aspx
This is the advice of Hector Milla, editor of SameDayLoansCity.com, who points out that most pay day lenders deposit money into borrowers' accounts within 24 hours.

"It is advisable to apply for a pay day loan online, this way borrowers save time because there is no need to present documents at all, they just need a checking account where lenders will deposit money," he explained.

It also means they can shop around to find the best deals available, instead of visiting just one or two stores in town, he added.

And Mr Milla advised consumers to apply for pay day loans early in the morning, as this could ensure they receive their credit the same day.

Writing in Illinois' State Journal-Register recently, Tan Westmoreland, regional manager of AmeriCash Loans, said pay day loans can act as an important lifeline in times of financial trouble.


]]>http://www.welcomefinancial.com/news/archive/Consumers-'should-apply-for-pay-day-loans-online'-608.aspx
Writing in the Illinois newspaper the State Journal-Register, Tan Westmoreland, regional manager of AmeriCash Loans, said pay day loans can be "a means of survival when hardship strikes".

He explained that in the event of a financial emergency, consumers need help immediately and pay day loans - which are short-term credit solutions designed to tide consumers over until their next pay check - can provide this.

And he insisted that providers of pay day loans work with borrowers to ensure they are able to meet repayments and avoid getting into trouble with debt.

According to a recent report by KLAS-TV, pay day lenders are seeing an increase in business as cash-strapped consumers turn to them for short-term loans.

One consumer told the news provider that pay day loans had provided her with a financial helping hand at a time of difficulty.


]]>http://www.welcomefinancial.com/news/archive/Pay-day-loans-'an-important-lifeline'-423.aspx
The news provider cites several consumers whose plans to travel overseas have been hampered by rising costs and high levels of debt.

Diana Koziupa, a psychiatrist from Pennsylvania, said she and her husband used to fly to Europe three or four times a year.

However, larger air fares have prevented them from taking their usual trips this year and instead the couple went to Oregon to enjoy a summer vacation.

Business trips are also taking a hit, with firms sending their employees to fewer overseas meetings to cut costs.

"Europe is totally out of the question for leisure and a remote possibility for business," said Ms Koziupa.

A number of debt-addled consumers are even cutting down on healthcare spending and visiting their doctors less as they try to rein in their spending, according to a recent survey by the National Association of Insurance Commissioners cited by the Wall Street Journal.


]]>http://www.welcomefinancial.com/news/archive/US-holidaymakers-'staying-at-home'-861.aspx
According to the Labor Department, which released the data, this figure is the largest in five years and provides further evidence that the economy is taking a sharp downturn.

The biggest job cuts were made in the construction, manufacturing and retail sectors.

In the last 12 months, over 2.2 million US citizens have lost their jobs, adding to the financial pressures they are facing.

Rising debt levels and soaring food and fuel costs are putting a huge strain on the budgets of many American families.

As a result, many consumers are spending less, with recent government data revealing flat retail sales in August.

Meanwhile, financial analysts have warned that unemployment could reach seven per cent before labor market conditions improve, Reuters reports. The current jobless rate stands at 6.1 per cent.


]]>http://www.welcomefinancial.com/news/archive/September-sees-159,000-job-losses-750.aspx
The figures show that despite a 0.5 per cent rise in incomes, personal consumer spending remained unchanged.

This may suggest that families are choosing to use any extra cash they have as a result of larger pay checks to reduce their debt levels or boost their savings.

However, recent inflation data revealed that prices are rising at their fastest rate in over 13 years, putting a squeeze on real disposable income.

Commenting, John Ryding at RDQ Economics told AFP: "Consumer spending is on track to decline 2.7 per cent in real terms in the third quarter based on the data for July and August."

Meanwhile, the government is once again attempting to secure the banking of the House of Representatives for its financial rescue package. A vote on the bill is expected on Friday.


]]>http://www.welcomefinancial.com/news/archive/Consumer-spending-flat-in-August-906.aspx
According to a report by KLAS-TV, pay day lenders are seeing an increase in business as consumers look for quick and easy solutions to their financial troubles.

Pay day loans are short-term solutions which allow consumers to borrow small amounts to cover unforeseen costs until they receive their next pay check.

On a visit to a pay day loans store, one customer said the pay day option had provided a financial helping hand under difficult circumstances.

"I was at the point where I didn't know where to go," she told KLAS-TV. "I came down here and they helped me."

Doctors interviewed by USA Today recently said debt problems and financial worries are causing many US consumers to experience stress.

Family physician Albert Levy told the news provider that this was prompting the onset of physical ailments such as exhaustion.


]]>http://www.welcomefinancial.com/news/archive/US-consumers-'turning-to-pay-day-loans'-895.aspx
According to financial analysts from several firms, weaker economic growth in the third and fourth quarters of the year could prompt further jobs losses.

And some warn that unless the government takes action to tackle the financial crisis, the jobless rate could rise even higher than seven per cent.

Joel Naroff from the consulting firm Naroff Economic Advisors told USA Today that without a bailout from the White House, unemployment may even top 8.5 per cent.

Meanwhile, Joel Prakken, the chairman of Macroeconomic Advisers, told Reuters that he expects difficult labor market conditions to persist for another nine or ten months.

Such news is unlikely to appease families already struggling to manage their debt and cope with the rising cost of living.

A recent poll conducted by Harris Interactive revealed that one in ten employers plan to make job cuts in the fourth quarter, USA Today reported.


]]>http://www.welcomefinancial.com/news/archive/Unemployment-'could-reach-7%'-522.aspx
According to experts interviewed by USA Today, both ordinary citizens and businesses will find it harder to gain access to credit as lenders tighten their criteria.

The news provider suggests that many will become increasingly selective about who they lend to, agreeing only to provide loans to those who present the least risk of default.

Consumers facing rejection when applying for personal loans could consider pay day loans, which are offered on a short-term basis and can be applied for online.

They provide borrowers with an immediate solution to financial crises, tiding them over until the arrival of their next pay check.

Eddy Marsh, a financial advisor at Next Day Payday Loans, said recently that pay day loans could prove to be a consumer's "best friend" when times get tough.


]]>http://www.welcomefinancial.com/news/archive/Consumers-facing-tighter-lending-conditions-452.aspx
According to USA Today, experts believe the news of the bailout delay could cause consumer confidence to plummet and business to take a nose dive.

The Fed may bring lending rates down in a bid to boost the economy, which may be good news for those facing debt.

But economists are in doubt as to whether this would have the desired impact.

Donald Straszheim, vice-chairman of Roth Capital Partners, said a rate cut would be "another signal that the Fed sees the danger here and is pushing wherever they can".

However, he added: "I don't believe it would have much effect."

Meanwhile, George Bush has warned that the US economy has reached a critical point and has expressed his determination to get his rescue package through Congress.

He said there will be painful consequences if the deal is not passed.


]]>http://www.welcomefinancial.com/news/archive/Economists-predict-more-rate-cuts-442.aspx
The news provider said 33 per cent of respondents used the word 'depression' to describe the current state of the economy.

Almost half are worried about their home losing value and nearly three-quarters think the financial troubles facing the country will get worse before they improve.

Just three per cent said they believe the economy is growing, although 42 per cent expect it to grow in a year from now, suggesting many consumers see an end to the current crisis.

However, debt problems and the rising cost of living do appear to be taking their toll, with 30 per cent of respondents having postponed or thought about postponing a major purchase.

Figures released earlier this month by TransUnion LLC revealed that the number of consumers who were delinquent on their credit card debt payments increased in the second quarter of 2008.


]]>http://www.welcomefinancial.com/news/archive/Consumers-see-a-depression-on-the-horizon-210.aspx
The research, carried out by Harris Interactive for USA Today and CareerBuilder.com, shows that one in ten employers expect to cut staff during the final quarter of the year.

The third quarter saw 14 per cent of employers make job cuts, putting further financial pressure on many families already struggling with debt, USA Today reports.

According to figures from the Labor Department, employers have reduced their staffing levels for each of the last eight months through to August.

Friday October 3rd will see the release of official government data on the jobs market.

Meanwhile, a separate poll conducted by USA Today revealed that 33 per cent of US citizens believe the economy is in a period of depression, while just three per cent think it is growing.


]]>http://www.welcomefinancial.com/news/archive/New-poll-prompts-further-job-fears-430.aspx
Eddy Marsh said pay day loans can be obtained by filling in a simple application form and borrowers can shop around to find the best deals.

He pointed out that many conventional loan applications take time to process and it can be a while before consumers receive the credit they need.

With pay day loans however, the process is quick and simple, allowing consumers to respond quickly to financial emergencies and reduce the "distress" associated with debt.

A recent report by USA Today revealed that debt worries are causing many US citizens to experience anxiety and even exhaustion.

Health experts told the news provider that unlike stress at work, financial stress can be long-lasting and can lead to more serious health problems and complications.


]]>http://www.welcomefinancial.com/news/archive/Pay-day-loans-'are-financial-friends'-203.aspx
Figures from the Labor Department show that new unemployment benefit claims reached their highest level since the World Trade Center attacks in September 2001 at 493,000.

The government said hurricanes Ike and Gustav had been responsible for a large proportion of the increase as residents were forced out of work.

Steven Wood, president of Insight Economics in California, told the International Herald Tribune: "The labor market is clearly in recession."

There are now 3.542 million citizens in receipt of jobless benefit in the US, the Labor Department confirmed.

Meanwhile, a daily poll by Gallup Management Journal has revealed a slump in consumer confidence following the collapse of Lehman Brothers, the sale of Merrill Lynch and the takeover of AIG.

Many citizens are also facing mounting debt problems and fears of unemployment.


]]>http://www.welcomefinancial.com/news/archive/Claims-for-jobless-benefits-on-the-increase-838.aspx
Writing in the Worcester Telegram, columnist Kenneth J Moynihan points out that parents who pay off their credit cards, mortgages, heating bills and pay day loans on time will be less likely to get into debt.

Imparting this attitude onto children will ensure that they do not suffer serious debt problems themselves when they get older, he suggests.

"Depending on their ages, the youngsters can be taught to enjoy vicariously the satisfaction we all feel as we demonstrate the discipline and the good luck necessary to keep our personal debts under control," Mr Moynihan states.

And he claims it is likely that "belt-tightening" will have to continue into the decades ahead as wealth becomes "concentrated" in fewer hands and the gap between rich and poor widens; a lesson that must be passed on to younger generations.

According to figures from the Federal Reserve, total consumer debt in the US stands at $2.587 trillion.

]]>http://www.welcomefinancial.com/news/archive/Parents-'should-set-good-financial-example-for-kid-825.aspx
According to a report by USA Today, rising debt levels and record home foreclosures are causing US citizens to worry about their financial situation.

Albert Levy, a family physician, told the news provider that feelings of self-failure are adding to the stress that many people are feeling from day to day and are causing them to experience physical ailments such as exhaustion.

"Some people feel that at least if they have a real heart attack or stroke, they have a good excuse not to bring money home," he remarked.

The report points out that unlike stress ahead of a work deadline or an unwelcome appointment, financial stress is long-lasting and can develop into more serious ailments.

Katy Kamkar, a clinical psychologist at the Center for Addiction and Mental Health in Toronto, told USA Today recently that stress can prompt a variety of health problems.

Those who are experiencing financial stress and anxiety may consider pay day loans to help them meet essential costs until their next pay check.


]]>http://www.welcomefinancial.com/news/archive/Financial-worries-'causing-stress'-767.aspx
According to a daily poll by Gallup Management Journal, 86 per cent of consumers questioned on September 20th said they thought economic conditions were worsening.

This compares to September 14th when 77 per cent of consumers said they believed this to be the case, suggesting the recent financial crises have had an impact on how consumers feel about the country's economic prospects.

Explaining the change in sentiment, Gallup chief economist Dennis Jacobe said: "A lot of people trusted that these big Wall Street investment firms couldn't go broke. As trust erodes, it creates problems."

Consumers across the US are also facing large debt problems, with many falling behind on mortgage repayments or even experiencing foreclosure.

A recent analysis of census data commissioned by USA Today revealed that 75 per cent of homeowners with annual incomes under $50,000 are having problems repaying mortgage debt.


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According to Harris Interactive's AutoTechcast report, 15 per cent of motorists in the US are very likely or extremely like to purchase a plug-in hybrid in the future, Environmental Leader reports.

A similar study carried out in Europe revealed that the proportion of European drivers who anticipate buying a hybrid vehicle is also 15 per cent.

But US consumers believe they will have to charge their cars for longer, with 56 per cent expecting to plug in their vehicle at least once a day, compared to just 30 per cent of those in Europe.

Recent research by the International Energy Agency also revealed that US citizens are turning their backs on larger sports utility vehicles in favor of smaller, more environmentally-friendly cars in an effort to save money, AFP reports.


]]>http://www.welcomefinancial.com/news/archive/Hybrid-cars-'in-demand'-among-US-consumers-378.aspx
According to an analysis of census data commissioned by USA Today, 38 per cent of mortgage borrowers spent 30 per cent or more or their pre-tax income on housing.

Those with annual incomes under $50,000 struggled the most, with 75 per cent having problems paying home loans, compared to 23 per cent of those with incomes over $50,000, the news provider reports.

The analysis, carried out by the Joint Center for Housing Studies at Harvard University, also revealed that homeowners in Miami-Fort Lauderdale in Florida were hit particularly hard by mortgage debt, followed by those in Stockton, California.

Earlier this month, a report by the Mortgage Bankers Association revealed that debt problems had caused almost one in ten US homeowners to either fall behind on their mortgage payments or experience foreclosure at the end of June.


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According to data from the market researcher IMS Health, spending on doctors' appointments, prescription drugs and preventative tests is under pressure.

Citing a recent survey by the National Association of Insurance Commissioners, the Wall Street Journal reports that 22 per cent of consumers are visiting the doctor less often as they look to save money, while 11 per cent are spending less on prescriptions.

However medical experts warn that by ignoring healthcare problems, US citizens could be risking more serious complications later.

Consumers struggling to meet healthcare costs could consider pay day loans to fund a doctor's visit ahead of their next pay check.

Meanwhile, medical professionals have told USA Today that debt problems could lead to physical illness as a result of increased stress and anxiety.


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According to Martin Crutsinger, the economics writer for the Associated Press, the money committed by the government to buy up bad mortgage debt is likely to put further pressure on its already squeezed budget.

He points out that campaign promises made by presidential hopefuls John McCain and Barack Obama could be seriously constrained by the cost of financial bailouts.

"The government is already spending more than $400 billion a year just to pay interest on the national debt. The higher that debt goes, the higher the government's borrowing costs and the less it has to spend on other programs," writes Mr Crutsinger.

Meanwhile, Carnegie Mellon economics professor Marvin Goodfriend has told USA Today that the economy will be in a "danger period" for the next six to eight months.


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Families facing debt problems, made worse by rising food and fuel prices, may be glad to hear that policymakers will be meeting this weekend to discuss the options available.

"This needs to be big enough to make a real difference and get to the heart of the problem," Mr Paulson told reporters.

His comments came on the same day that George Bush insisted such "unprecedented circumstances" required "unprecedented measures".

Mr Paulson suggested the government would step up its purchases of mortgage-backed securities, pointing out that this will cost taxpayers far less than further collapses.

Mortgage giants Fannie Mae and Freddie Mac have already been taken over, while the Federal Reserve has rescued the insurance group AIG from bankruptcy in a move seen by many as the most radical in its history.


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The Minnesota Department of Commerce said that regardless of whether they have a physical presence in the state, lenders must comply with state law.

As well as being licensed in Minnesota, they will also have to comply with limits on fees, charges and loan amounts, officials confirmed.

"We have a pretty conservative fee schedule and we want the internet lenders to toe the line," Kevin Murphy, deputy commissioner of the Minnesota Department of Commerce's financial examinations division, told the Minneapolis Star Tribune.

Pay day loans are short-term loans that are offered to consumers facing a financial shortfall to tide them over until their next pay check.

Residents in Arizona are preparing to vote on Proposition 200, which seeks to regulate pay day lenders in the state.


]]>http://www.welcomefinancial.com/news/archive/Minnesota-to-regulate-pay-day-loans-064.aspx
According to TransUnion LLC, 1.04 per cent of credit card holders were delinquent at least 90 days on one or more cards in the three months to July 30th, up from 0.91 per cent the previous quarter, the Associated Press reports.

The average debt per borrower also increased from quarter to quarter, from $1,673 to $1,717, an increase of 2.6 per cent, the credit reporting agency found.

Delinquency rates were highest in Nevada and Florida, where the housing market crisis has hit consumers the hardest, while credit card holders in Alaska and Tennessee had the highest debt levels.

Ezra Becker, principal consultant for TransUnion's financial services group, told the Associated Press that the rise in delinquency rates could be down to the increase in gasoline prices during the second quarter, as well as the slowing economy.

Meanwhile, a survey published this month by Rutgers University revealed that around one-third of working citizens owe more on their credit cards than they have in retirement savings.


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According to professionals interviewed by USA Today, debt worries can trigger stress and anxiety, which can lead to a variety of health issues.

"With any kind of situation that we perceive as stressful, and we perceive ourselves as being unable to cope with it, we experience physical symptoms," explained Katy Kamkar, a clinical psychologist at the Center for Addiction and Mental Health in Toronto.

Headaches, insomnia, neck pain, nausea, diarrhea and loss of libido are all cited as possible stress-related ailments that people in debt could suffer.

Michele Dodds, vice-president of health and wellness at ComPsych, said even those not experiencing debt problems are feeling anxious as a result of economic uncertainty, made worse this week with the collapse of Lehman Brothers.

The investment bank was declared bankrupt on Monday, leading to the loss of thousands of jobs in the United States and elsewhere around the world.

Those struggling with debt and potentially putting their health at risk may consider pay day loans to ease the stress until they receive their next pay check.


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In comments made to the Mt. Vernon Register-News, the organization's Beverly Caudill said the group has witnessed "a steady increase" in the amount of counseling sessions being attended.

At this location alone, there was a 12 percent year-on-year rise in the number of people looking for debt and financial advice.

"With credit cards making offers readily available, [some] people seem to lose control of spending," Ms Caudill told the newspaper.

People struggling to make ends meet at the end of the month may wish to take out a pay day loan to boost their financial situation before they get paid.

Earlier this month, US Treasury secretary Henry M. Paulson said the government needs to protect the health of the US economy by bolstering both consumer spending and business investment.


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Credit counseling service Take Charge America suggests that by doing this US citizens can plan what they should be spending and where.

The organization states that people should use this time of year to start planning how they are going to eliminate debt.

"Spring is a perfect time for consumers to review their financial situation and rethink their spending habits to help them to better manage money," said Mike Sullivan, director of education at Take Charge America.

Making a budget is also said to be way of better managing one's money and can help bring people out of debt.

America's total debt in 2007 was said to be $53 trillion - a figure that increased year-on-year and one that has already risen in the opening months of 2008.


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According to the Associated Press, community organizations are seeing an increase in the number of US citizens seeking help and advice on meeting soaring heating bills.

Ann Heidenreich, executive director of Community Energy Services in Canton, New York, told the news provider: "People are very worried about this winter."

The price of heating oil and natural gas is predicted to reach record highs over the coming months, putting a squeeze on household finances.

The Associated Press points out that since many families are already facing mounting debt and job losses, higher heating bills could hit them particularly hard.

Households having difficulty meeting day to day living costs such as heating bills may consider pay day loans as a means of dealing with short-term financial emergencies.

Letitia McEastland, creditor relations supervisor at Family Credit Counseling Services, told BusinessRockford.com recently that many families are using pay day loans "so they won't get their lights cut off".


]]>http://www.welcomefinancial.com/news/archive/US-citizens-growing-anxious-about-winter-heating-c-479.aspx
Consumer credit rose at an annual rate of 2.1 per cent, down from 5.1 per cent in June. Total consumer debt in the US now totals $2.587 trillion.

This figure excludes mortgages and other loans secured on real estate.

Before the Fed's announcement, economists had predicted an increase of $8.5 billion in consumer credit during July. However, the real increase was just $4.6 billion.

Reports suggest the slowdown is down to a restriction on credit by banks and a reduction in spending by households.

"Consumers faced with rising unemployment have backed away from spending," Chris Rupkey, chief financial economist at the Bank of Tokyo-Mitsubishi UFJ, told Bloomberg.

"On top of this, banks are pulling credit lines and refusing to increase credit limits for even well-heeled credit card customers," he added.

Figures released by the Commerce Department last month revealed that consumer spending rose by 0.2 per cent in July, compared to 0.6 per cent in June.


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It reveals that US citizens feel more optimistic about the future, with 38 per cent expecting their personal financial situation to be stronger in six months' time.

This helped overall consumer confidence to climb 35 points to 69.2, compared to just 33.8 in August.

Outlining the possible reasons behind the boost in confidence, T.J. Marta, a strategist at RBC, said falling oil and gasoline prices may have contributed.

Marta also suggested the recent bailouts of Fannie Mae and Freddie Mac could have had an impact as many hope they will help to breathe life back into the housing market.

The latest figures from the Federal Reserve also show that growth in consumer debt slowed in July to 2.1 per cent, down from 5.1 per cent in June.

US citizens expecting a change in their financial fortunes in the future but struggling to make ends meet at the moment may consider pay day loans to help them meet bills and other costs in the short-term.


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According to the International Energy Agency (IEA), motorists are turning their backs on "gas-guzzling" sports utility vehicles and opting for smaller vehicles, AFP reports.

There is also evidence that consumers already struggling with debt are driving and flying less, choosing cheaper modes of transport such as trains and buses, the report found.

David Fyfe, head of the oil industry and markets division at the IEA, told AFP: "There's a growing body of evidence that high prices in conjunction with weakening economic conditions are having an impact on people's lifestyles."

The report revealed that US citizens are even moving away from suburbs and into urban centers to be closer to their places of work, thereby reducing the amount of money they spend on travel.

In July, total US consumer debt excluding mortgages reached $2.587 trillion, according to figures from the Federal Reserve.


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USA Today reported recently that home energy bills could reach record levels this winter and families facing debt pressures may find it difficult to cope.

Terry Townsend, former president of the American Society of Heating, Refrigerating and Air-Conditioning Engineers, told the news provider that there are a number of steps households can take to minimize the impact of rising bills.

He advised families to have their heating systems checked to make sure they are working as efficiently as possible and to have their homes examined for energy efficiency to identify possible improvements.

Making sure windows and doors are properly sealed, fitting insulation and controlling temperatures using a thermostat are all effective ways of conserving heat, he explained.

Replacing old electrical appliances with modern, energy efficient ones can also help to keep electricity costs down, he added.


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The Mortgage Bankers Association said 9.2 per cent of households were in one of these two camps, up from 8.8 per cent at the end of March.

Jay Brinkmann, chief economist at the association, said the numbers have risen as a result of worsening debt problems in some of the hardest-hit states.

He said improvements in states such as Texas and Maryland were overshadowed by difficult conditions in California and Florida, which together accounted for 39 per cent of all of the foreclosures during the second quarter.

"Because of the sheer size of California and Florida, an improvement in the national numbers, whether delinquencies, home prices or any other measure, is unlikely until we see some turnaround in those two states," Mr Brinkmann told CNNMoney.

In total, the Mortgage Bankers Association said a record 1.249 million homes were in foreclosure between March and June.

Meanwhile, the Labor Department has announced that the unemployment rate reached a five-year high of 6.1 per cent in August.


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Writing for the Arizona Daily Star, Stan Barnes said many of the assertions made by opponents of the pay day loan industry are "crazy".

He insisted that with reforms in place to address concerns there should be no reason why pay day loans cannot sit comfortably alongside other forms of credit.

His comments come before Arizona residents vote on Proposition 200 - the Pay Day Loan Reform Act, which among other things mandates lower fees on pay day loans and cracks down on unregulated lenders.

"What hard-working Arizonans need is a reformed pay day loan industry as another credit option during difficult economic times. Removing this option, or any other for that matter, is not going to help anyone," Mr Barnes stressed.

Meanwhile, Payday Loans Directly has claimed that pay day loans are a simple way to cope with unforeseen financial emergencies.


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USA Today reports that home energy costs could reach record levels this winter, leading to increased debt risks for many families.

Citing forecasts from the Energy Information Administration, the news provider says heating oil bills are likely to be up 36.3 per cent this winter compared to last year, while gas bills could be up 23.8 per cent.

Mark Zandi, chief economist at Moody's Economy.com, told USA Today: "The added financial burden of heating our homes will make this the toughest winter since that of 2001-02."

Those struggling to meet soaring home energy costs during the winter months may consider taking out pay day loans to tide them over until the spring.

Inflation in the US hit a 17-year high in June, according to official figures.


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USA Today reports that children's clothing retailers are seeing a rise in the number of older customers making purchases in their stores.

Research carried out for the publication by Pitney Bowes MapInfo reveals that cities with larger retirement communities are seeing increased sales of kids' apparel.

Commenting on the findings, Meg O'Beirne, marketing director at Kelly's Kids, told USA Today: "Grandparents are in a better position to lend a hand in tough times."

And Carolyn Beem, a spokesperson for L.L. Bean, said it is hardly surprising that grandparents are helping with bills at a time when families are facing debt pressures.

Figures release by the Commerce Department last week show that personal income fell 0.7 per cent in July, while real consumer spending declined by 0.4 per cent.


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Letitia McEastland, creditor relations supervisor at Family Credit Counseling Services, told BusinessRockford.com that many families see pay day loans as "a means to survive".

"It's no longer so they can go on a quick vacation and go out of town," she explained. "This is so they won't get their lights cut off."

Official figures from the state of Illinois show that the average amount borrowed by citizens on pay day loans stood at $375 in June, with 26,337 loans being issued.

A recent poll by CNNMoney.com revealed that 43 per cent of US citizens feel worse off now than they did at the end of the last recession in 2001.

And a survey released by Rutgers University shows that 32 per cent of US employees are "very concerned" about their job security.


]]>http://www.welcomefinancial.com/news/archive/Pay-day-loans-used-to-'keep-the-lights-on'-939.aspx
Annual growth figures from the Commerce Department were revised upward from a previous estimate of 1.9 per cent.

Economists put the rise down to increased consumer spending - which has been spurred on by government tax rebates - and claim a recession is now less likely.

"This is still an economy that faces slow times but not a recession," Avery Shenfeld, senior economist at CIBC World Markets, told AFP.

Such comments may come as good news to those with large amounts of debt who are struggling to meet day to day living costs.

However, analysts are warning that economic difficulties are not over yet, as the property market remains under pressure and unemployment is still rising.

In terms of inflation, the Federal Reserve has warned that the outlook is "highly uncertain".


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According to a survey released by Rutgers University, 32 per cent of employees are "very concerned" about the possibility of redundancy, while 43 per cent are "somewhat concerned", the Gannett News Service reports.

If their fears were to become a reality they could struggle with debt, as one third said it is often the case that they do not have enough money to make ends meet.

"There's a lot of bad news out there and the workplace is just one of the weak spots," said Carl Van Horn, co-author of the report.

Those struggling to meet daily living costs may consider a pay day loan to help with bills and other essential expenses in the short term.

A poll conducted by CNN has revealed that 47 per cent of US citizens feel worse off now than they did at the end of the last recession in 2001.


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According to US court data, almost one million bankruptcies occurred during the period, up 28.9 per cent on the previous 12 months.

Non-business bankruptcies made up 96.5 per cent of the 967,831 cases filed, suggesting that debt and inflation are putting increasing pressure on the finances of ordinary families.

The US Bankruptcy Court's sixth district, which covers Kentucky, Michigan, Ohio and Tennessee, saw the highest number of filings, according to the Associated Press.

Retired bankruptcy judge William T Boda told the Columbus Dispatch: "Now with the defaults in mortgage lending in particular, more people are finding that they have no out."

Meanwhile, Reuters reports that billionaire investor Warren Buffett recently called on the US government to tackle the nation's debt problems.


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According to the Conference Board, its consumer confidence index rose to 56.9 in August, up from 51.9 in July and higher than the 53 predicted by analysts.

The monthly increase was the second recorded by the consumer research body, although the reading is still significantly down on this time last year, which has left some analysts feeling cautious.

However, Dana Saporta, an economist at Dresdner Kleinwort Securities, claims the barometer offers "a glimmer of hope" to consumers and puts the increase down to falls in prices at the gas pump.

Consumers still struggling despite this temporary respite may consider pay day loans to tide them over in the short-term.

Presidential candidates Barack Obama and John McCain are both hoping to ignite consumer confidence in the economy and polls show US citizens believe Obama is the best man for the job.


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Although the policymaking group gave no indication as to the exact timing of any future rise, it said members "generally anticipated" that one would occur.

On August 5th, the Fed left rates unchanged at two per cent. But rising inflation and ongoing difficulties in the credit markets are beginning to cause concern.

"A number of participants worried about the possibility that core inflation might fail to moderate next year unless the stance of monetary policy was tightened sooner than currently anticipated by financial markets," the minutes stated.

Fed chairman Ben Bernanke recently warned that the outlook for inflation in the US remains "highly uncertain", although he did suggest that an economic slowdown, lower oil prices and a stronger dollar could limit price rises towards the end of the year.

According to the Associated Press, most economists are not expecting to see a rate hike until next year. Any increase in the cost of borrowing would put further pressure on those struggling with debt.


]]>http://www.welcomefinancial.com/news/archive/'Next-rate-move-may-be-a-hike'-Fed-minutes-show-156.aspx
Speaking to a Kansas City Federal Reserve Bank conference, he said the weakening economy together with lower oil prices and a stronger dollar could limit price rises.

Commentators have suggested the announcement is a sign that interest rates will remain on hold for the time being.

However, Mr Bernanke warned that the outlook for inflation remains "highly uncertain" and the Fed must concentrate on preserving price stability in the months ahead.

US inflation jumped to 5.6 per cent in July, the fastest rate since 1991, putting huge pressure on consumers' finances.

A new poll by CNNMoney.com reveals that 47 per cent of US citizens feel worse off now than they did at the end of the last recession in 2001.

People struggling with debt may wish to consider pay day loans to help them during the current difficulties.


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So far, the results show that 43 per cent of people believe the economy is "very poor" at the moment and 47 per cent feel worse off than they did in 2001.

According to CNN, this is hardly surprising since house prices have fallen dramatically in many areas of the country while the price of food and gas has risen rapidly.

However, the poll also shows that 42 per cent of citizens feel better off now than they did seven years ago, suggesting that there are plenty of people who are getting by in spite of the downturn and rising debt levels.

CNN believes this could be down to unemployment levels, which are "still not at a level that you'd typically find in a serious recession".

The number of homes in foreclosure is also relatively small when examined in context, the news provider points out.

Last week, Federal Reserve chairman Ben Bernanke warned that the outlook for US inflation remains "highly uncertain".


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A study commissioned by TrueCredit.com found that almost a quarter of students graduate owing more than $5,000 to credit card companies.

Ten per cent of those quizzed said they had managed to acquire plastic card debt of $10,000.

Luci Dunn, TrueCredit.com's director of consumer education, said that people in these groups could find the adverse impact of their debts proves to be long term.

"Credit card debt impacts more than just your wallet today. It can also affect your credit score well beyond your college years," she warned.

Illinois State University's newspaper, the Daily Vidette, recently warned that credit card debt can be particularly dangerous for students.

It explained that as the value of credit card debt rises if it is not repaid, it impacts on the ability of the individual to make fixed repayments on products such as student loans.

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In recent months the growing number of Americans defaulting on debt has led to major credit card companies such as American Express and Capital One experiencing a drop in earnings, reports Bloomberg.

Bill Hardekopf of price comparison website Lowcards.com told the news agency that is likely to be bad news for borrowers.

"One way issuers may compensate is by being very quick to the trigger to increase rates, so if your credit score takes any kind of dip, they may increase your interest rates," said Mr Hardekopf.

A rise in credit card interest charges would add to the debt problems that many Americans already face following substantial rises in the cost of food and fuel.

It may also see more borrowers looking at alternatives to credit cards, including personal loans and debt management plans.

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Research conducted by the Agriculture Department (USDA) concluded that the price of food could climb by between five per cent and six per cent in 2008.

America has not seen a rise at that level since 1990 and it comes at a time when consumers are having to deal with spiraling energy and gas prices.

USDA economist Ephraim Leibtag told Reuters that he was surprised by the latest figures, which followed last month's prediction that food inflation could be just 4.5 per cent this year.

He added that the expected moderation in prices had not materialized, which did not bode well for the rest of 2008.

USA Today recently reported that the surge in fuel prices had begun to have an adverse impact on the agricultural sector, with producers seeing profits fall despite food prices rising.

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Using the platform of a guest column in the Des Moines Register, Tim Miller, the Center for Consumer Freedom's communications director, said that such regulations would have an adverse impact on the people they are intended to help.

He explained that by restricting the availability of pay day loans, the authorities were simply making life more difficult for people struggling to cope with their finances.

Mr Miller backed up his argument by citing research from the Federal Reserve Bank of New York, which showed that occurrences of bounced checks and the use of expensive overdrafts have increased in states where the immediate loans are not available.

"Eliminating a major short-term credit option for financially stressed adults is hardly an act of mercy. We should be helping Americans find more debt-management options - not taking them off the table," he concluded.

Ohio is one of the states which is clamping down on the pay day loans industry and recently approved a law capping interest rates at 28 percent.

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While the Fed has edged down overnight federal funds by more than three per cent in the past year, long-term mortgage rates have "barely budged".

In fact, they have risen in recent weeks. A 30-year fixed-rate mortgage now averages 6.52 per cent, compared with 6.17 per cent at the start of the year.

A key reason why rates are so high is that both Fannie Mae and Freddie Mac are taking on fewer mortgages.

"The mortgage giants were major buyers in mortgage markets and lower demand has pushed yields higher," wrote Mr Waggoner.

A recent NFCC-MSN Money Financial Literacy Survey revealed that one in ten homeowners have missed or been late with a mortgage payment in the past 12 months, reports the Hattiesburg American.

Americans, who face high gasoline, food and mortgage costs, may need to consider debt management plans in the imminent future.

]]>http://www.welcomefinancial.com/news/archive/'Americans-not-benefitting-from-Fed's-funding-cuts-842.aspx
The organization, which is currently circulating petitions in Ohio, is campaigning against legislation aimed at imposing an interest rate cap on short term loans.

Repealing Section 3 of house bill 545 is one way of protecting Ohioans' financial freedom, says the campaign body.

The bill, which is due to come into force next month, caps interest rates, restricts borrowing to four times a year and extends the term of a loan from two weeks to four weeks.

Ohioans 4 Financial Freedom spokeswoman Kim Norris said: "We will continue our efforts to inform Ohioans that their financial choice for an emergency loan could be taken away."

Attorneys for the organization have argued that Article 2 of the Ohio Constitution grants Ohioans the right to reject any law or section of law by voting 'no' in a referendum.



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It comes after legislators imposed an interest rate cap on payday loans. The ad can also be viewed on Ohioans for Financial Freedoms' website.

The ad is part of a campaign to drum up support for a referendum to repeal a key plank of a bill that limits consumer borrowing.

"Repealing Section 3 of house bill 545 means ... protecting Ohioans' financial freedom and protecting consumers' rights to privacy about their personal financial choices," states the organization.

The bill, which is due to come into force next month, caps interest rates, restricts borrowing to four times a year and extends the term of a loan from two weeks to a month.

Ohioans for Financial Freedom is currently circulating petitions in Ohio.

Supporters of pay day loans say they can help people avoid the hassle of a missed credit card bill or a bounced check.




]]>http://www.welcomefinancial.com/news/archive/Ohio-lenders-roll-out-pay-day-loans-ad-642.aspx
According to figures from Realtytrac, the number has increased by 55 per cent over the past year.

The figures provide a stark illustration of the problems faced by the US housing market, which has been hit hard by the credit crunch, which is now in its 13 month.

Over 272,000 people received a foreclosure notice in July and some 77,000 properties were repossessed by banks.

As a result, a 17 per cent of the homes offered for sale are foreclosure properties.

Florida and California have been especially affected by the rise in foreclosures, according to the report.

Earlier this month, it was reported by the British Broadcasting Corporation that many Americans are walking away from their mortgages and allowing the banks to foreclose on their homes.

Other homeowners are turning to pay day loans to help pay their mortgage, according to the Consumer Credit Counseling Service of Greater New Orleans.

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While this is good news, the department pointed out that the level of joblessness is still a cause for concern.

Initial claims for state unemployment insurance benefits fell to 450,000 in the week ending August 9 but it is the fourth consecutive week that new claims have exceeded 400,000.

The labour department also said that the number of people remaining on benefits after one week of state aid has jumped to 3.42 million. The figure has not been this high since November 2003.

Earlier this month, the department announced that 47,000 jobs were shed in May, while in June there were 51,000 job cuts.

Americans struggling with rising food and fuel prices or tax debt may need to consider taking on a debt management plan.


]]>http://www.welcomefinancial.com/news/archive/Jobless-figures-hide-mixed-picture--301.aspx
Consumer prices jumped 0.8 percent in July, following a gain of 1.1 percent in June.

Prices were up 5.6 percent on a year ago, which represents the biggest year-over-year rise since January 1991

Energy prices rose four percent in July and were up 29.3 percent on the same month in 2007. Food costs, meanwhile, have also gone up and are now six percent higher than a year ago.

Commenting on the figures, Steven Wood of Insight Economics told USA Today that the Federal Reserve is now in a difficult position.

"At the present time the Fed is caught between a rock and a hard place, with renewed financial turmoil, a deteriorating economy and climbing inflation," he stated.

Across the Atlantic the situation is even worse. Consumer prices inflation in the UK climbed to 4.4 percent in July, well ahead of the government's target of two percent.

Americans who face high gasoline and food costs may need to consider debt management plans in the near future.



]]>http://www.welcomefinancial.com/news/archive/Inflation-at-17-year-high-266.aspx
According to a report by the Brookings Institution, the number of low earners went up in 34 of 58 metro areas, with a particular emphasis in the Northeast and Midwest.

The report examines the relationship between poor areas and the growing number of low-income workers who were eligible for earned income tax credits between 1999 and 2005.

Alan Berube, co-author of the report, said the people living in these communities are "already at the margins".

He added: "When things are booming, they get swept up in the growth and when there's a downturn, they are the first to get affected."

It is widely accepted that the rising price of gasoline, food and commodities is at the root of America's inflation problems.

Americans struggling with rising prices or debt may need to consider a debt management plan in the imminent future.



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In fact, it has never been easier or faster to get an emergency cash loan when an unexpected expense bursts onto the horizon.

Pay day loans, which can be described as easy cash advances, enable borrowers to have money in their pocket with a minimum amount of hassle.

"Though cash payday loans are not advisable for solving long term financial problems, they are a convenient and cost effective way to tide you over until you receive your next payday check," says Best Syndication.

"Many people use this service as an excellent way to aid the required cash flow until payday."

According to American money expert Andy Lewis, pay day loans offer "instant relief" from a variety of financial crises like unpaid medical bills.

This is especially useful at a time when people have less money put aside to deal with emergencies.


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If such a crisis occurs in the middle of the month and there is no access to funds, consumers have the option of seeking out cheap pay day loans, he wrote in an article for Best Syndication.

These are short term loans which are offered on the basis of an upcoming pay day. This is one of the reasons why lenders offer these loans for a period of between 14 and 30 days.

Pay day loans are useful as they can alleviate sudden emergencies, he said before pointing out that because these loans are advanced without collateral, the interest rates will be "slightly higher".

Last month, finance professor Dr Chris Robinson said banks should offer more short term loans to Americans looking for quick ways to finance their debt.

He believes banks should create small unsecured loans products for people who are in need of emergency cash.



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Adam Gibbons, general manager for Check City Online, pointed out that savings banks do not usually underwrite short-term unsecured personal loans.

This is because they are not able to recover the processing costs that are associated with these types of cash advance loans.

"Pay day loans are designed to meet short-term obligations," he stated. "Cash advances are designed to help people meet unexpected bills and expenses."

Pay day loans are particularly useful at times of financial crisis and can be used in a number of ways, such as paying for healthcare or groceries.

Not only can the applicant usually get the money within few hours of approval, pay day loans also can be provided without any collateral.

In addition, bad creditors will be able to increase their credit score by quickly repaying the loan installments.



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Don Early, the chief executive of a Kansas-based lender, said that despite the current economic environment and a political backlash against instant cash loans, the industry is performing well.

He was speaking after QC Holdings announced income of $2.2 million in the second quarter of the year.

Mr Early spoke out against lawmakers who were trying to take away the option of pay day loans from those Americans who need access to emergency funds.

In particular, he cited legislature passed in Ohio, describing it as "inappropriate" and "politically-motivated.

"If we are unable to find such a product or service, we will be forced to close our remaining branches in Ohio," he said.

Last year, 19 million US households used pay day loans to fulfill their immediate and short-term financial needs.




]]>http://www.welcomefinancial.com/news/archive/Pay-day-loan-sector-'performing-well'-427.aspx
It means the interest that US banks charge each other has now been held for the past two months.

A statement from the Fed pointed to a rise in economic activity thanks to exports and consumer spending but noted the "highly uncertain" inflationary pressures that continue to cause concern.

"Tight credit conditions, the ongoing housing contraction, and elevated energy prices are likely to weigh on economic growth over the next few quarters," the Fed stated.

The price of gasoline, food and commodities is responsible for much of the union's inflation problems. However, experts at the Fed are confident that the pressure will moderate over the coming months.

Homeowners looking for a cut in borrowing costs may be disappointed, although some will just be relieved that the Fed did not decide to increase rates.

Last week, it was reported in the Hattiesburg American that some households are turning to pay day loans to help pay their mortgage.


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Writing in the Hattiesburg American, Julie McAdoo, from the Consumer Credit Counseling Service of Greater New Orleans, said borrowers are taking out short term loans or dipping into their retirement funds.

A recent NFCC-MSN Money Financial Literacy Survey revealed that one in ten Americans with a mortgage report being late or missing a mortgage payment in the previous 12 months.

Finance expert Tom Collens told Ms McAdoo: "If making the mortgage payment is a struggle month after month, if it is going to present a hardship to the family, then other options should be considered."

Earlier this week, it was reported by the BBC that many Americans are walking away from their mortgages and allowing the banks to foreclose on their homes.



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Emily Davidson, from credit.com, believes cash advance loans are becoming increasingly popular as more consumers look for emergency finance to help them until their next pay check.

There is no arguing with the fact that rising cost of gasoline and food credit has hit people hard, she said.

"Pay day loans can be a good tool for quickly and easily borrowing cash during an emergency if you don't have other financial options," stated Ms Davidson.

The credit crunch has also had the effect of making the availability of high street loans for people with a bad credit history even more difficult.

Last month, California-based advice portal Best Syndication said that going to relatives or friends for money may not always be an option. Therefore taking out a short term loan is worth considering instead.



]]>http://www.welcomefinancial.com/news/archive/Pay-day-loans-a-'good-tool'-677.aspx
Employers slashed 51,000 jobs last month, with manufacturing, construction and the service industries most affected. The jobless rate for teens increased to 20.3 percent in July.

There were also 461,000 so-called discouraged workers in July, an increase of 94,000 in the past 12 months.

Discouraged workers are not looking for jobs because they believe no work is available.

The labor department also released revised figures for May and June.

According to the revisions, 47,000 jobs were cut in May instead of the previously-stated 62,000. In June, there were 51,000 job cuts, not 62,000.

The number of unemployed across the union now stands at 8.8 million.

Americans without employment, who face high gasoline and food costs, may need to consider debt management plans in the imminent future.



]]>http://www.welcomefinancial.com/news/archive/Unemployment-hits-four-year-high---810.aspx
In second and third place are New Hampshire and Connecticut, with $2,109 and $2,094 respectively. The states with the lowest median credit card debt are Mississippi, Iowa and West Virginia.

The figures were compiled by Americans for Fairness in Lending, which lobbies for more stringent credit card regulations.

"Unfair practices by credit card companies are fueling these high debt levels," said Jim Campen, executive director of Americans for Fairness in Lending.

"Consumers are victims of a range of abuses such as doubling and tripling interest rates."

However, a report by the Federal Reserve said the pace of economic activity has slowed because consumers are reducing their spending.

Americans struggling with rising prices or debt may need to consider a debt management plan in the imminent future.


]]>http://www.welcomefinancial.com/news/archive/Alaskans-top-credit-card-debt-table-567.aspx
In his latest article, John M Berry points out that some key interest rates have changed little in the past year.

These include rates on 30-year fixed-rate home mortgages and so-called jumbo loans, which are at least one percentage point above their 2007 levels.

To make matters worse for Americans, many lenders have tightened criteria on home equity loans and non-mortgage loans.

"Lines of credit have been cut and the level of banks' commercial and industrial loans outstanding are shrinking," he wrote.

Last week, a finance professor, Dr Chris Robinson, said banks should offer more short term loans to Americans who need a quick and easy way of financing their debts.



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As of February 1st 2009, all companies engaging with customers in Pennsylvania must comply with the state's consumer discount company act (CDCA).

The department of banking said the act applies to fast money loan companies that offer non-mortgage loans of less than $25,000.

"A person licensed under the CDCA is authorized to negotiate or make loans to Pennsylvania residents pursuant to the rates, terms and conditions contained in the CDCA," states the department in its latest press release.

Thanks to the internet, it is possible for consumers to apply for quick pay day loans from anywhere inside or outside the state.

Matthew Glans, a legislative specialist at The Heartland Institute in Chicago, recently expressed concern that some lawmakers want to take away pay day loans from people who are in debt or who need an instant cash loan.

He told the Daily Herald: "These loans emerged to meet consumer demand when other sources of financing were unavailable."



]]>http://www.welcomefinancial.com/news/archive/Pennsylvania-outlines-new-rules-for-pay-day-lender-705.aspx
A new report by the Fed showed that the pace of economic activity has slowed as consumers curtail their spending because of the upward pressure on the cost of gasoline and food.

Higher commodity and energy prices are being passed onto consumers by businesses looking to squeeze out a profit.

"All reporting districts characterized overall price pressures as elevated or increasing," the Fed said in its Beige Book report.

Moreover, the real estate market is struggling with weak sales and declining house prices across large swathes of the country.

But Fed chairman Ben Bernanke said he does not believe the US economy will suffer from what analysts sometimes call stagflation.

Many economists expect the Fed to leave interest rates alone when the rate-setting committee meets on August 5th.

Consumers struggling with rising prices or tax debt may need to consider a debt management plan in the near future.


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Karen Trainer, for example, bought a $500,000 apartment in California in May 2006 with money borrowed from a bank.

Two years later, Ms Trainer owed $500,000 on her mortgage, despite the fact that her apartment was only worth $300,000.

According to the report, she decided to stop her mortgage payments and let her bank repossess her home.

The broadcaster believes there is now a "powerful incentive" in the US for homeowners in dire straits to walk away from their mortgages.

Commenting on the trend, Professor Nouriel Roubini of New York University said: "This is becoming a tsunami of voluntary defaults."

Standard & Poor's/Case-Shiller home price index recently revealed that US property prices in April were, on average, 15.3 percent lower than in the same month last year.

US consumers struggling with their finances may need to consider debt management plans in the near future.



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Dr Chris Robinson, a finance professor from Canada's York University, believes banks should create small unsecured loans products for people who need emergency cash.

But after having done extensive research on unsecured loans in the US, Canada and Australia, he believes there should be a limit on fees, reports the Age.

"I will be recommending that the federal government implement national legislation that will cap the fees and charges loan businesses can charge consumers," he stated.

Short term loans tend to attract people who have a regular job and bank account, but a poor credit rating.

According to Georgetown University's Credit Research Center, half of all short term loan borrowers in California earn between $25,000 and $50,000 a year.


Last month, the California Reinvestment Coalition revealed that nearly two million households in California are regular short term loan customers.


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A new report has warned that UK consumers will come under increasing strain in the run-up to Christmas as they find ways to pay for fuel, food, mortgages and rent.

The TDX Group's debt index shows there has been a rise in the number of debt management plans as the cost of living rises and the value of property declines.

At the moment, these plans account for £10 billion ($20 billion) of personal debt, but this is set to rise by another £5 billion by Christmas.

Mark Onyett, chief executive of TDX Group, said: "We're already seeing far higher numbers of consumers struggling with personal debts and the pressure is set to intensify over the coming months."

US consumers struggling with high gasoline and food costs may also need to consider debt management plans in the near future.



]]>http://www.welcomefinancial.com/news/archive/Debt-management-plans-on-the-rise-in-UK-590.aspx
Going to friends and relatives may not always be an option and therefore taking out a short term loans is something that is definitely worth considering, according to California-based advice portal Best Syndication.

Those with a bad credit history may not be able to access reasonably-priced credit from high street lenders but with instant pay day loans the rate of interest is structured in a "reasonable manner".

"These loans fill the financial gap and you can meet the unavoidable demands without any delay," states the website.

"You can make payments concerning medical bills, electricity bills, school, fees, credit card bills, car bills, grocery bills."

Last week, a report by the Fed showed that the pace of economic activity in the US has slowed as consumers struggle to cope with the cost of gasoline and food.



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Jeff Kursman, director of public relations of Check n Go in Ohio, said pay day lenders "fill a need that other lenders don't supply".

He also hit out at critics who highlight annual percentage rates or APR rather than the actual cost of taking out a pay day loan, which may only last two weeks.

As such, using a yearly measure to condemn pay day loans is a form of distortion, he told the Montgomery Advertiser.

He also drew attention to a study that found households without access to pay day loans are forced to use more expensive credit.

"Many of our customers do not qualify for financial programs from banks or credit unions, and these institutions often do not provide short-term, low-dollar loans," he told the newspaper.

"It's important to keep our services open to our customers, most of whom use our products responsibly."

In 2007, 19 million US households used pay day advances to fill immediate short-term financial needs.




]]>http://www.welcomefinancial.com/news/archive/Pay-day-loans-'fill-a-niche'--230.aspx
Writing in the Daily Herald, Matthew Glans said that because major lenders have become increasingly risk-averse, it seems "ill-timed" to reduce the alternatives available to borrowers.

Senator Dick Durbin's proposed interest rate cap of 36 percent ignores the benefits of pay day lending, according to the specialist.

"These loans emerged to meet consumer demand when other sources of financing were unavailable," stated Mr Glans.

"The decision as to whether short-term loans are acceptable should lie in the hands of consumers, not state officials."

In fact, a study by the Federal Reserve Bank of New York found that states with bans on pay day lending have seen higher rates of bankruptcy and an increase in bounced checks.

According to Goodwill Industries, some American citizens have opted for short-term loans to make mortgage repayments in recent months.


]]>http://www.welcomefinancial.com/news/archive/Expert-warns-against-pay-day-loan-legislation--939.aspx
Conducted by Deloitte & Touche, the survey shows that around a quarter of the cost of providing a pay day loan in British Columbia goes on expenses

These include operating costs, the price of capital and the cost of absorbing bad debt.

The survey comes after legislation was passed that gives the authorities in British Columbia the power to regulate pay day lenders by setting an upper limit on fees and rates.

Canadian Payday Loan Association president Stan Keyes said: "Setting the right rate cap will further protect consumers while ensuring access to credit where needed through a viable industry."

Pay day loans are particularly useful for those who are in debt and at times of sudden financial crisis.

They can be used in a number of ways, such as paying for healthcare, according to Best Syndication.


]]>http://www.welcomefinancial.com/news/archive/Pay-day-loan-survey-reveals-lending-costs-010.aspx
Rising gas and food prices have hit many families hard, at a time when unemployment is rising and job security has become a major issue.

A study conducted by market researchers Nielsen found that 63 percent of consumers have reacted to the increasing cost of living by attempting to reduce spending.

With debt a concern for many people, just over half of those quizzed said they had reduced the number of times they eat out, reports USA Today.

Others said they had resorted to cost-cutting measures such as using more coupons and switching from branded to own-label products.

Nielsen's senior vice president Todd Hale told the newspaper that the number of visits to clothes stores and office supply businesses were falling, adding: "People are spending money on food and the products they need to sustain life."

Meanwhile, figures compiled by AAA suggest that the cost of gas is beginning to fall, reports CNN Money.

The motoring group's statistics showed that the average price of unleaded fuel on Saturday was $4.077 a gallon, compared to $4.09 the previous day.

]]>http://www.welcomefinancial.com/news/archive/Economic-troubles-prompt-consumer-spending-changes-428.aspx
He was speaking after telling a Senate committee that there is a real danger of inflation rising even further, putting more pressure on people's finances.

According to the Labor Department, producer inflation was up 1.8 percent last month because of the rising cost of gasoline and food.

"The possibility of higher energy prices, tighter credit conditions and a still-deeper contraction in housing markets all represent significant downside risks to the outlook for growth," he stated.

Experts believe it is likely that interest rates will remain pegged at the current rate of two per cent over the next few months.

Last month's inflation jump was the biggest rise since in seven months and followed a 1.4 percent hike in May.

Consumers struggling with rising food and fuel costs may need to consider a debt management plan.




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According to Omaha World-Herald, someone who owes $2,500 on a credit card and makes payments of $50 a month at ten percent interest would have that debt for five years. About $747 would be in interest alone, taking the total debt up to $3,247.

A person with a poor credit rating who borrowed the same amount but at a 20 percent rate of interest would be stuck with the debt for 11 years.

The Bankruptcy Research Center's executive director Samuel Gerdano told the publication: "The overall trend of rising bankruptcies reflects the growing financial strain felt by US households, burdened by high debt, rising mortgage costs and falling home values."

Earlier this month, a poll in USA Today revealed that more than half its readers think their children will have more difficult lives than them because of debt problems.

But according to Best Syndication, a pay day loan is one way that borrowers can overcome their financial difficulties.



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Reporting the comments of research company RetailMetrics LLC's president Ken Perkins, the news provider indicates that the coming months could be tough for shops, as consumers feel the effects of high prices for various commodities.

"The back-to-school season is going to be challenging," said Mr Perkins, who was reflecting on the recently-published retail figures that show how heavy discounts prompted positive spending patterns in June.

However, this is not expected to continue, with the AP citing tighter credit, spiralling gas prices and higher-than-average food costs as some of the factors US citizens must deal with in the coming months. Indeed, gas reached $4 per gallon recently.

People looking to pay for every-day items may benefit from taking out pay day loans to see them through until their salary is paid into their bank accounts at the end of the month.


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According to the governmental organization, the advance figure for seasonally-adjusted initial claims was 346,000, which equated to a 58,000 decrease on the previous week's unrevised rate.

Despite this report, the Associated Press (AP) claims that it will have no effect on the "weakness" in the nation's labor market.

The AP states that the department's figures do not propose America's economic health has taken a particularly positive turn for the better, which suggests there are still a high number of citizens who will struggle with debt in the coming months.

Jobs in the US have been cut for the six months consecutively and the official total number of job losses in 2008 is close to 450,000.

US consumers without employment, who face high gas and food costs, may need to consider debt management plans in the imminent future.


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Pay day loans are particularly useful at times of sudden financial crisis and can be used in a number of ways, such as paying off power bills or paying for finance healthcare, according to Best Syndication.

Not only can the applicant usually get the money within few hours of approval, pay day loans also can be provided without any collateral.

Cash advance loans are available to those with a good credit history but also those who have a bad credit history.

In fact, bad creditors will be able to increase their credit score by quickly repaying the pay day loan installments, says the financial news portal.

"One of the best ways to get the instant pay day loan is to get it online. Online payday loans are generally instant cash providers," it stated.

According to a recent report in the Toronto Sun, Canadians are "flocking" to pay day loan providers.



]]>http://www.welcomefinancial.com/news/archive/Pay-day-loans-'great-for-those-who-need-emergency--492.aspx
Figures compiled by Freddie Mac showed that the average interest rate on a 30-year fixed-rate mortgage is now 6.37 percent, compared with 6.35 percent seven days earlier.

The statistics also showed that the average interest rate for a five-year Treasury-indexed hybrid adjustable-rate mortgage climbed by 0.04 percentage points to 5.82 percent.

Despite these increases and the backdrop of American households struggling to cope with rising food and fuel prices, Freddie Mac's chief economist Frank Nothaft said that more people are trying to borrow money.

"The number of mortgage applications for home purchases over the week ending July 4th was nearly ten percent above the over five-year low set just two weeks prior," he explained, citing statistics compiled by the Mortgage Bankers Association.

A recent study by Realty Trac showed the extent of debt problems faced by many Americans, as it revealed that the number of home foreclosures in June was 53 percent higher than in the corresponding period in 2007.

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It is the biggest monthly rise since last November and followed a 1.4 percent jump the prior month, according to the Labor Department.

Over the past 12 months, wholesale prices have risen 9.2 percent. In fact, annual inflation is now rising at its fastest pace in more than 25 years.

Wholesale energy prices climbed six percent, while the price of gasoline soared by nine percent.

The figures also show that core producer prices, which exclude food and fuel, increased by a more moderate 0.2 percent.

Rudy Narvas, senior economist at New York's 4Cast Inc, told Bloomberg that the data "should keep the Fed on its toes about inflation".

"There are inflation risks but economic growth is still fairly fragile, so the Fed will stay on hold," he predicted.

Meanwhile, the Commerce Department has said that retail sales grew by just 0.1 percent in June.

Consumers struggling with high gasoline and food costs may need to consider debt management plans in the near future.


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According to CashAdvancePaydayLoansCa.com, quick pay day loans are a convenient way of resolving cash emergencies such as a sudden car repair or an overdue energy bill.

Not only can the applicant usually get the money quickly, with cash deposited directly into the applicant's bank account, pay day loans can be provided without any collateral, which is useful for those who do not own their own home.

The loans are for a short-term period and repayment times are usually between 14 and 30 days.

Cash advance loans are "a fast solution for people who are in urgent need for cash", said a spokesperson for the website.

"Getting a loan from a bank or borrow money from a relative could be time consuming and sometimes embarrassing."

At the end of June, the Long Beach Press-Telegram reported a study from Georgetown University's Credit Research Center that found half of all Californians who rely on pay day loans earn between $25,000 and $50,000.



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Workers who need some funds to pay for health treatment or trips to the gym may benefit from taking out a short-term loan.

According to a report by the Associated Press (AP), US consumers are less likely to opt for cosmetic surgery than they once were, while gym memberships fell last year for the first time in a decade.

Citing research from the American Society of Plastic Surgeons (ASPS), the news provider indicated that 53 percent of ASPS members have reported a slowdown in business since citizens began feeling the bite of the credit crunch.

People have less disposable income due to a variety of price hikes on consumer goods. ASPS president Richard D'Amico stated that the society is a "luxury provider", which perhaps explains its reduced activity.

The AP also highlighted a recent survey from the International Health Racquet & Sportsclub Association, which has claimed that memberships averaging $35 per month dropped to 41.5 million from 42.7 million in 2006.

Last month, Americans had to deal with gas prices of more than $4 per gallon, increasing their everyday expenditure yet further.


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Reports collated by the Associated Press (AP) indicate that even though a number of consumers across the US are in debt, people are still looking for a summer getaway and long-haul trips.

Martha Wharton, the vice president of marketing at travel firm TCS Expeditions, is reported as saying that financial concerns exist among the company's customers, but this has not affected business so far.

"They're very concerned about the economy, the political uncertainties, all of those things, but they're not changing their buying patterns because of it - yet," Ms Wharton told the AP.

And a similar scenario is explained by Pamela Hurley-Moser, owner of Portland-based Hurley Travel Experts.

She told the news provider that there are currently two distinct classes of customer at present - those who definitely cannot afford to travel and people who "scrimp and save" in all other areas of life in order to be able to afford a break.

This perhaps highlights what can be achieved if people follow the correct debt management processes.

In the UK, the Association of British Travel Agents said recently that Britons continue to want to travel abroad - to places such as the US - despite the global credit crunch affecting people's finances.


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Gilbert Optimist Club, which focuses on serving its local community by putting on events and holding regular meetings, has reflected on the American financial climate, reports the Mansfield News Journal.

The newspaper states that the group met this week in preparation for the weekend's July 4th celebrations, but there were other issues being discussed.

Some members of the gathering were said to be "disgusted" and scared by the latest events in the US, which include $4-per-gallon gas prices, higher-than-average food costs and uncertainty about the jobs market.

Sherry White from Orlando, Florida reportedly explained: "There is a sense of helplessness everywhere you look. It's like you're stuck in one spot and you can't do anything about it."

Pay day loans may be an option for people who are finding it difficult to make ends meet, as they can offer a financial boost at the end of the month.

Jeff Kursman, director of public relations at Ohio-based Check 'n Go, contacted the Anniston Star this week to claim that responsible pay day loan lenders can play an important role in American society.


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Apparently, this brings the total number of job losses to 438,000 in the year so far in what has become an unstable employment market.

Richard Yamarone, an economist at investment and business analysis group Argus Research, reflected on what this means to the millions of American citizens, who should be celebrating Independence Day this weekend.

"The deteriorating jobs climate will dampen many a barbecue this weekend," he told the Associated Press. "It's hard to celebrate when you are out of a job."

In addition to potentially ruining any planned July 4th parties, losing a job can be the first step into the realms of debt, especially in the current climate of high food costs, rising gas fees and reduced property prices.

Commenting on the latest employment figures, US secretary of labor Elaine L Chao warned that now is not the time for government tax hikes as it is a period when workers need to keep hold of all the money they can get.

She did add that the unemployment rate is currently lower than the 1990s, when the US was encountering similar economic pressures.


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Describing the financial product as "a quick way to raise money", the newspaper suggests a number of points to bear in mind when choosing to borrow cash in this way.

Apparently people should only borrow what they are certain they will be able to pay back, as well as ensuring they are fully aware of the terms and conditions of the loan before they take it out.

"If you must borrow, only borrow an amount you're 100 per cent sure you can repay on the due date," the publication states.

Citizens should not agree for their employers to sign over their whole paycheck to a pay day loan lender if they cannot afford everything they owe, it adds.

Offering further advice, the newspaper claims consumers may wish to work with their financial adviser to ensure they do not get into money-related difficulty in the first place.

Last week, the Long Beach Press-Telegram reported a study from Georgetown University's Credit Research Center. The survey in question found that 50 percent of Californians who opt for pay day loans earn between $25,000 and $50,000.


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British news provider the BBC has been running a weekly program on its Radio 4 channel, which gives an insight into the economic landscape in America and highlights the problems US citizens are encountering.

Reporter James Naughtie presents the show - called American Dreams - which tries to explain how life has become difficult for some people as prices of commodities spiral.

The BBC claims that there are a number of Americans who are worse off than they were under the previous White House administration and suggested many are concerned for their futures.

Focusing on Detroit in particular, the corporation states: "People who thought they would remain reasonably comfortable are discovering that rising medical bills, falling wages and petrol at $4 a gallon are making life difficult."

Pressure asserted by banks and mortgage lenders compounds the trouble, it adds.

Standard & Poor's/Case-Shiller home price index revealed last month that US property prices in April were on average 15.3 percent down when compared to the same month in 2007.


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At least that is the opinion of the director of public relations (PR) at Ohio-based Check 'n Go, Jeff Kursman, who claims that responsible pay day loan lenders provide an important service to American people.

His comments are reported in the Anniston Star and are in response to an editorial run by the newspaper that Mr Kursman describes as an "unfair assessment" of the short-term loan industry.

Highlighting the benefits of this method of borrowing, the PR director states that consumers' financial options would be "severely restricted" without pay day loans, as well as being more costly.

"In 2007 alone, 19 million US households used pay day advances to fill immediate short-term financial needs," he indicates, adding that the sector has grown due to "consumer demand for credit options".

Pay day loans are also rising in popularity on the other side of the Atlantic, with price comparison website MoneySupermarket.com claiming the product is being used 55 percent more in the UK than it was in September 2007.


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The Long Beach Press-Telegram reports that there are a high percentage of middle-income-earning Californians who seek this form of short-term loan.

Citing a study from Georgetown University's Credit Research Center, the publication claims half of short-term borrowers in the state earn $25,000 to $50,000 per annum.

Furthermore, 25 percent of these people who opt for pay day loans earn more than $50,000 each year.

Apparently, citizens who choose this product to help boost their finances are aware of any extra interest charges they will be required to pay.

The California Reinvestment Coalition has provided another study on the subject, which is also highlighted by the publication. This research claims that there are two million households in California who choose pay day loans and 99 percent are repeat customers.

A study by the same organization last October found that many of the largest lenders in the state were not helping borrowers struggling to pay their mortgages avoid foreclosure.


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Pay day loans in particular are being utilised to help citizens contribute to any property fees they may have, it is claimed.

The CCCS advises people not to push themselves financially if it is going to result in hardship further down the line.

"Getting into the house of your dreams is just the first step. The long-term objective is staying there," explains Angela Roach, the manager of the counselling service.

She added that if people are going to struggle to pay their mortgages each month, other options should perhaps be considered at the outset.

House prices in the US are down on last year, according to this month's Standard & Poor's/Case-Shiller home price index.

All 20 metropolitan areas studied in the research reported a year-on-year drop in property fees this April - the first time this has ever happened since the index was established.


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Former Columbia College Chicago student Kelly Lynch is one individual who is having to deal with the debt repayments following an expensive education - and he did not receive his degree from the institution.

Reporting Mr Lynch's predicament, social commentary news provider In These Times claims that the decision by the US' largest student loan lender Sallie Mae to suspend a loan consolidation program has left a number of young people in financial peril.

Some student borrowers now have higher-than-expected interest rates to pay on their college loans.

Commenting on the matter, Mr Lynch said: "What good are well-educated kids who, right out of the cradle, have major financial obligations before most own a house, a car or know where the nearest grocery store is?"

Students in the UK only start paying off their loans when their gross earnings total £1,250 ($2,485) a month or £288 per week.


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Many people in this area of the US are becoming overwhelmed with debt from credit cards, according to Craig D Robins, a bankruptcy attorney, who was talking to Newsday.com.

The online portal also details similar comments from personal finance counselor Colin Nupp, who works for Debt Counseling Corporation in Hauppauge.

"A lot of these people are now maxing out these credit cards and are at a point where they can't put anything more on them," Mr Nupp reportedly claimed.

He added that this can result in people feeling like they are "spinning in wheels" as they are paying their finance charges with the minimum payment only.

Last week, the Federal Reserve opted to keep interest rates at two percent - a move that ensures the cost of general borrowing is not on the rise yet.



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Credit card borrowing limits are being reduced at a time when US citizens are looking to utilise this kind of credit on a more regular basis, the news provider reports.

But with debt mounting and becoming more of an issue due to a number of factors - such as falling house prices, higher-than-average commodity costs and low employment prospects - it is leaving consumers with fewer spending options than before.

The AP quotes American Bankers Association spokesman John Hall as saying: "This is what [lenders] have to do at this time."

Pay day loans have been suggested as a way people who are struggling financially can get hold of money to pay for items they require.

Borrowing in this way is "simple", according to bestsyndication.com, while GreenvilleOnline.com claimed earlier this month that the product bridges a gap which currently exists in the credit market.


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Reporting how this is going to affect the US public, USA Today claims that America's real estate market is potentially losing one of the only things that was keeping it upright as house prices continue to drop across the country.

Greg McBride, senior financial analyst at bankrate.com, had similar thoughts on the matter.

He told the publication that increasing mortgage rates are a blow for citizens, who are already dealing with high gas prices and soaring food costs.

"For months, the only thing the housing market had going for it was that mortgage rates were low," Mr McBride is reported as saying. "With them going up to 6.5 percent, it's like getting kicked when you're down."

Last week, Goodwill Industries' consumer credit counseling service revealed that a number of people in the US are using the short-term borrowing option of pay day loans to help them pay mortgage fees.


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William Hummer has claimed that there are a number of factors, including job insecurity and inflation, perpetuating this attitude among the US public.

And talking to the Associated Press, the financial expert predicted this feeling is not going to disappear in the near future. Indeed, with millions of Americans in debt, it is likely that monetary concerns will be a topic of consideration for sometime to come yet.

"I don't think this can be purged immediately by an election or anything else," said Mr Hummer. "I think it's endemic, deep-rooted and likely to persist."

These comments follow the Conference Board's latest consumer confidence index, which shows that US consumers' opinions of the economic future are the most negative they have been since 1992.

Total American debt, including credit card borrowing, is widely reported to have exceeded $9 trillion recently.


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Mark Zandi, chief economist at Moody's Economy.com, has claimed that March 2009 should be the next time the Federal Reserve moves interest rates up.

His comments, reported by the Associated Press, come after the Fed indicated that the next time its Federal Open Market Committee (FOMC) changes the interest rate, it will increase.

If Mr Zandi's predictions are true, Americans will still have a number of months to ride out what has become a tough economic climate of rising food fees, high gas prices and general consumer unrest.

Those who are struggling financially may find they receive a boost from taking out pay day loans.

Yesterday, the FOMC announced that interest rates would remain at two percent for the time being, following one of its eight scheduled meetings of the year.


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This is the target the committee has set itself following the announcement that interest rates in America will remain at two percent this month. Citizens in debt may be among those who welcome the fact that the cost of borrowing has not risen for this month.

Various economic commentators had predicted that the FOMC would keep rates unchanged and "some firming in household spending" was partly responsible for yesterday's decision.

Announcing its verdict, the monetary policy group acknowledged that energy prices have increased of late and said that labor markets have softened.

"Tight credit conditions, the ongoing housing contraction and the rise in energy prices are likely to weigh on economic growth over the next few quarters," the committee stated.

Federal Reserve chairman of two-and-a-half years Ben S Bernanke and vice chairman Timothy F Geithner were among the board members to vote for no change in rate.


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Standard & Poor's/Case-Shiller home price index shows that all 20 metropolitan areas analyzed in the study posted year-on-year price decreases for the first time since the barometer was introduced eight years ago.

The survey indicates that property fees in April were 15.3 percent down when compared to the same month in 2007.

Las Vegas and Miami recorded the most severe falls, with property in these large US cities falling in value by 26.8 percent and 26.7 percent respectively.

Lower house prices are indicative of the economy as a whole, which sees a number of Americans struggling to pay for everyday goods. Taking out a pay day loan may be an option for those who have important items to pay for before their next paycheck but do not have the cash to hand.

Website bestsyndication.com claimed last week that this type of loan provides a "simple way" of overcoming difficult financial situations.


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Many Americans in debt will hoping that the rate remains at two percent or is reduced further still, while some economists, who are concerned that inflation in the country needs to be curbed, could be looking for the rate to increase.

The general consensus is that the Fed will keep rates as they are, but this will still leave US citizens struggling to make ends meet in the current economic climate of high gas prices and rising food costs.

By keeping rates at the same level, the prime lending rate - which applies to certain credit cards and loans - will remain at five percent, according to the Associated Press.

A poll by the Triangle Business Journal last week found that 60 percent of Americans want the level of interest to remain as it is, while the same percentage (20 percent) called for an increase and a decrease.


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The program is hosted by newspaper financial columnist David Paramo from a studio in Mexico City.

Every evening between 17:00 and 18:00 local time, he gets involved in people's financial problems, offering advice, comfort and sometimes a number of practical solutions.

Occasionally, the radio celebrity will get in touch with banks and lenders to find some answers from experts live on air.

Perhaps getting to the crux of the issue, Mr Paramo told the newspaper: "The Mexican financial system has grown exponentially in the last few years.

"The access that Mexicans have to more and more [credit] is incredible, but most people don't know how to use credit."

Meanwhile, Americans in debt await this week's interest rate decision from the Federal Reserve. Many commentators believe that the rate will stay at two percent, but there are calls for it to be pushed up to help curb inflation.


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The website claims that these short-term loans can be approved under "very easy terms and conditions" if the applicant has been suitably employed for the last six months and has a good source of income.

Online pay day loan providers are often a popular source for the financial product, the portal states.

Commenting further, the site suggests that pay day loans are sought after when small monetary matters are not dealt with and consumers find they have "extra weight" on their pockets.

Seen as emergency cash loans, GreenvilleOnline.com reported earlier this month that the product bridges a gap in the credit market. It said that consumers often use pay day loans to avoid having to bounce a check or miss a credit card repayment.


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Sleep specialist Dr Michael J Breus suggests that if people write down the things that stress them out, they will feel better about themselves.

Another way of avoiding bedtime thoughts about how to get out of debt is to spend 15 minutes earlier in the day thinking about debt. Assigning this time to the problem, may mean that debtors will no longer need to consider the issue late at night, Dr Breus claims.

In his column for the Huffington Post, the expert states: "Schedule [the debt debate] early in the day or first thing in the morning, and be done with it."

Dr Breus is a clinical psychologist and is also involved with the American Board of Sleep Medicine. His first book was entitled Good Night: The Sleep Doctor's 4-Week Program to Better Sleep and Better Health.


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That is according to Karen Ignagni, president and chief executive officer of America's Health Insurance Plans (AHIP), who has been reflecting on a recent survey conducted by Harris Interactive.

She said that people in the US do not currently have enough savings "to weather even a short-term disability".

The study claimed that 15 percent of people born just after the war were very or extremely financially prepared if a disability occurred, while 55 percent felt they were not at all or somewhat prepared for that eventuality.

"Most baby boomers will face serious financial hardship if a disability occurs," said Humphrey Taylor, chairman of the poll.

Results from a LA Times/Bloomberg survey earlier this month showed that the percentage of people who believe their finances are very or fairly secure has dropped below 60 per cent for the first time in 15 years.


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David Braun suggests that they do not understand about staying within a budget – something that may lead to debt later down the line.

Reporting the comments, Pierce College publication the Roundup states that it is easy for people at college to find themselves falling into "huge pits of debt".

This apparently occurs due to the price of school fees, but also because of everyday purchases students make, such as coffee and Red Bull.

Wells Fargo personal banker Tony Bailey's comments also highlight the way students find it difficult to manage their funds.

"[The] funny thing is that the students don't really watch their spending," he told the newspaper. "They believe [their] parents have the cash to bail them out."

America's baby boomers are said to be in too much debt, according to a survey by Harris Interactive for America's Health Insurance Plans. The research found that many of this age group are not in a healthy enough financial situation to deal with a potential disability.


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Some 60 percent of this section of US society are worried about getting out of debt, the financial research claims.

Reporting the survey, Chase Card Services suggests that consumers need to be a given the opportunity – via the right tools - to make the correct credit decisions and better their financial futures.

In other debt news this week, it was revealed in the Wall Street Journal health blog that many new doctors just getting their first jobs may well have their debt taken off them by their new employers.

Five-figure sign-on bonuses are not uncommon for people starting employment in the profession, as medical staff look for ways of removing debt accrued from their student days.

Debt repayment is usually organized under certain conditions, whereby the employee has to commit to the paying company for a certain number of years.


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Those whose situations make it difficult or impossible for them to take out credit cards or bank loans can gain access to funds they need by taking out these products, according to the Intelligencer - Wheeling News Register.

Commenting on possible moves by Ohio legislators to place a cap on interest rates set by pay day loan operators in the state, the publication said that the consequences could affect consumers in a negative way.

"If that limit becomes law ... it undoubtedly will dry up a source of credit on which some Buckeye State residents depend," it said.

The newspaper also claimed that those setting the laws in the state are potentially more interested in making voters happy than they are in "enacting reasonable limits on pay day lenders".

Pay day loan lenders are often referred to as check cashers or deferred-deposit lenders. They can help those who need money quickly to see them through to their next paycheck.


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American households are experiencing rising expenses as gas and food prices soar and wages stagnate, according to economist David Smith.

As increasing numbers of banks experience struggling households defaulting on large debts, they are tightening up their credit standards and the mainstay of the economy, the "borrow-spend dynamic" is in danger of disintegrating, he explained.

In comments reported by Blogging Stocks, Mr Smith stated: "Lower interest rates are unlikely to persuade households up to their eyeballs in debt to borrow and spend liberally, nor will they inspire shell-shocked banks to liberalize their credit standards."

In this climate, short-term solutions to cash flow problems, such as pay day loans could sustain low-income households through the tougher times.

Credit card debt in the US has seen a vast increase, with lenders writing off 33 per cent more in debt this year than in 2006.

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With no need for collateral and no examination of credit history, these loans can be easily acquired by almost anyone with a steady job who needs a little extra to pay off bills or pay living expenses until the next paycheck arrives, according to finance adviser Tom Dikkin.

Writing for bestsyndication.com, Mr Dikkin explained that using pay day loans responsibly can allow those who urgently require relatively small amounts of cash to make it through to the next pay day without running up massive credit card bills or taking out a larger, harder to pay off loan.

For many, these are not even options as poor credit ratings make it impossible to find lenders willing to hand out cash or credit cards and the time taken to get approval may be too long.

In states with tight legislation surrounding pay day loans, many low-income families are struggling as their options become limited to bouncing cheques at $48 to $60 each or simply avoiding paying bills, leading to vital utilities being cut off, according to industry experts.

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GreenvilleOnline.com reports that a number of citizens in South Carolina find that the financial product is a useful method of keeping finances in order.

The website states that people from the region use pay day loans as "a cash-flow tool" instead of bouncing a check or having to miss a credit card payment.

South Carolinians "are overwhelmingly happy with the product, registering very few complaints", the portal claims.

Commenting on recent speculation that the product will be taken away as an option for consumers, the site calls on law-makers not to let US citizens "suffer" by restricting access to it.

"Banks and other financial institutions seldom, if ever, offer similar short-term loans, particularly when individuals with poor credit are involved," it says.

Writing for bestsyndication.com last week, financial expert Tom Dikkin said pay day loans are useful for people who need to get funds urgently, as long as they use the credit sensibly.


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If the $15 for each $100 borrowed (if borrowers shop around), charged by pay day loan companies was no longer available, many would have to resort to drastic measures, such as bouncing checks, which would cost $48 to $60 for each check.

Alternatively, bills could be ignored, leading to the cutting off of utilities or prosecution, or offshore lenders could be used, who can charge between $25 and $30 per $100 borrowed.

Lawrence Meyers, a financier involved in the lending industry, told Blogger News Network: "A responsible borrower is that borrower who understands these loans are intended for emergencies, who have chosen to enter into the transaction because cheaper alternatives were not available."

In the three years following the ban on pay day loans in Georgia, the Federal Reserve Bank in Atlanta returned an extra 1.2 million checks annually, according to a 2007 Federal Reserve Bank of New York staff report.

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The typical online web loan has an average interest rate of around 30 per cent, according to the Consumer Federation of America.

As gas prices rise and increasing numbers of Americans struggle to make ends meet, many are turning to higher interest web loans as the solution.

The tightening of the availability of pay day loans, which use paychecks as collateral and consequently do not involve a credit check, has led more consumers to take out web loans, some of which charge up to 2,000 per cent interest.

Experts suggest that oil prices could continue to rise, potentially reaching $150 a barrel this year and that the high prices will not be enough to stem demand in developing countries, according to CNN.

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Bill Horne, writing in his column for the People's Defender, has claimed various factors are causing Americans financial difficulties and leading some of them into debt.

Examples given for how consumers are being "squeezed" include the changing interest rates of credit cards and the "weight of higher gas prices".

Professor Horne also listed healthcare costs, rising food prices and energy bills as just some of the issues people in the US have to deal with.

One other matter he raised was that large corporations are apparently outsourcing jobs overseas, as well as importing cheap labor from abroad – which, he said, are reducing the employment opportunities for Americans.

In his concluding paragraphs, the professor called on Americans to pay down their debt and get their "houses in order". He also hinted that he and his wife will be using 2008 to pay down their own debt.

On his personal website, which is accessed via his college's portal, Professor Horne reveals that most of his time is spent helping students solve personal and job-related matters.


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Americans, many of whom are in debt and struggling with the current economic conditions in the US, appear to want the Federal Reserve Bank to keep the rate at two percent.

The website's poll reveals that 60 percent of people want the Fed to keep things as they are, while 20 per cent want a further cut. The same amount again would like interest rates to move up again, which some economists say will help counteract inflation.

As well as collecting opinions on what the Fed's next move will be, TBJ allowed readers to leave comments on the current financial situation in America.

One anonymous respondent, who perhaps strikes a chord with a number of people in the country, said: "Either keep them the same or lower them. With as much debt as everyone carries, this is what really cuts into the disposable income."

They added that this has an effect on all sectors of the economy, including gas and grocery affordability.

Jeannine Aversa, the Associated Press' economics writer, believes that it is more than likely there will not be no change in the interest rate next week.


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Economic activity is likely to firm during the second half of 2008 and then gather some strength next year, Mr Kohn told onlookers at the National Conference on Public Employee Retirement Systems Annual Conference in New Orleans this week.

He also claimed that consumer spending may well increase due to the rebates that taxpayers are now receiving.

Discussing recent economic developments in more detail, the vice chairman indicated that spending on consumer goods, including new motor vehicles, "has been soft" of late as Americans have come to terms with trillions of dollars of debt.

"Since last fall, rising prices for energy and food have made a significant dent in the purchasing power of consumers' incomes," Mr Kohn remarked.

Prices of homes have reportedly dropped recently, while credit conditions are said to have tightened. "In reaction to these adversities, households seem to have become extremely downbeat about prospects for jobs and income," he continued.

Earlier this month, the FRB made a move to protect consumers by proposing new rules to prohibit unfair credit card and overdraft practices.

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Offering ten tips for those just finishing college, the newspaper also suggests that renting a car when it is necessary is a way of avoiding high payments on gas, insurance and repairs associated with buying a vehicle.

Another method that can help people get out of debt is a "rainy day fund". Consumers are advised by the publication to gather enough money to cover "three to six months of expenses".

Stephen Brobeck, executive director of the Consumer Federation of America, reportedly stated: "Start saving immediately, even if the amounts are small - and do so automatically."

Providing further financial guidance, the newspaper indicates that lending money to friends is not a good idea as it can complicate relationships, while being skeptical about what salespeople are telling you is also practical if one is to keep on top of their finances.

A recent survey by Reuters and the University of Michigan, reported by CNN Money, revealed that more people in the US have reported a decline in their personal financial situation in 2008 than at any other time in the last 26 years.


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A survey by Reuters and the University of Michigan showed more people reporting a decline in their personal financial situation this year than at any time since 1982, reports CNN Money.

With food costs rising 5.1 per cent and gas prices reaching an all-time high, only one in five expects their situation to improve in the next year.

The rising cost of essentials has led to 14.3 per cent of disposable income being set aside to pay off debt - another figure at an almost record high.

Ken Goldstein, economist with the Conference Board, commented: "What's really pushing consumers into a funk is the fear of what's coming next."

"Consumers are afraid that the light at the end of the tunnel is an oncoming train," he added.

The Conference Board recently reported that its consumer confidence index fell from 62.8 per cent to 57.2 per cent between April and May this year.

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In a speech on the economic outlook at the International Monetary Conference in Barcelona, Dr Ben S. Bernanke claimed American citizens are still having to deal with an economic climate that includes falling house prices and higher energy costs.

A softer job market and tighter credit conditions are also affecting consumers, the chairman stated, which could lead to them needing short-term loans to see them through times of financial difficulty.

On the topic of real estate, Dr Bernanke said: "Residential construction continues to contract and the overhang of unsold new homes remains large, although it has declined some in absolute terms."

Dr Bernanke was sworn in as chairman of board on February 1st 2006. He also serves as chairman of the Federal Open Market committee.


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While the spiraling costs have had an impact on all, a survey of low-income Utah residents in April and May by the Crossroad Urban Center's Anti-Hunger Action Committee advocacy group showed that the poorest citizens are being forced into even deeper personal debt.

The survey found that 70 per cent had missed meals or gone to emergency food pantries in the last 12 months in order to pay for healthcare, while 71 per cent were avoiding medical treatment altogether, reports the Deseret News.

Pay day loans are becoming an increasingly popular solution, with over a quarter of Utah residents reporting using the loans to pay for medical bills.

Healthcare debt in the US is becoming commonplace, with two-thirds of patients who paid a ten per cent premium on their earnings still having to take on additional borrowing to cover medical costs, according to the Commonwealth Fund's Biennial Health Insurance Survey.

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Credit card spending on luxury items has declined, with 68.2 per cent of teenagers surveyed now using their credit cards for gas, reports Investment News.

While a large proportion of teens were responsible for managing their own financial situation, 11.8 per cent relied on their parents to keep them free from financial difficulties.

Jack Kosakowski, president of Junior Achievement USA, commented: "It is apparent from these poll results that rising gas prices are impacting teens as much as they are their parents."

"The question is, are the teens paying off these cards or are they passing the debt on to their parents?" he added.

In recent months oil prices have reached a record high, rising by around 40 per cent to over $133 a barrel.

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A survey by Unity Marketing found that spending on luxury goods fell by 20 per cent among those with an average income in the second half of 2007, according to the Associated Press.

The trend is reflected in the larger corporations as well, with coffee giant Starbucks closing 100 of its least profitable stores and sales of larger cars, trucks and SUVs on the decline as Americans' disposable income falls.

Juliet Schor, a sociologist at Boston College, explained that those with average incomes now have to think carefully before spending.

"People postpone purchases. People take on less debt and pay off more debt. They just get more conservative," she said.

The situation may be even tougher for those on lower incomes, as debt elimination is more difficult for those who find it hard to cut down on essentials.

Recent research showed that 29 per cent of those in low or middle income groups found that medical expenses contribute significantly to their overall credit card debt, according to creditcards.com.

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Will Wilkinson, from the Cato Institute, has been quoted as saying that people need money when they are young because they generally require more funds than they earn.

His comments, reported on marketplace.publicradio.org, come at a time when there is much debate in America about the levels of debt the country has found itself in.

Mr Wilkinson argues that last week's New York Times column by David Brooks, where he calls Americans' reliance on personal debt a sign of "rampant decadence", is not how things should be viewed.

"Saving and borrowing are both transfers from one stage of life to another," he is reported as saying.

It is rational for young adults to borrow money as they should eventually be making more money than they need in their later years, he adds.

The US is not the only country struggling economically at present. The British media has been calling on its government to take action to stop the current situation of rising prices getting any worse.


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Researchers at Northeastern University's Center for Labor Market Studies have found that a number of businesses are reducing employment opportunities because of weak consumer spending.

Young people, who are unable to fund their activities in between school and college with a job, may find themselves slipping into debt earlier than those who do get vacation work.

Joseph McLaughlin, a research associate at the center which conducted the survey, told Bloomberg television: "Teens are the lowest in the hiring queue because they have less experience and can usually only work limited hours."

He added that this age group is the "hardest hit in a recession".

Last week, results from a USA Today poll indicated that less than 50 percent of Americans thought their offspring would live a better life than they have, due to the current economic situation.


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John Cummuta's Transforming Debt into Wealth program allows citizens to move out of the red and boost their retirement funds in a short time period.

According to the professional financial adviser and businessman's website, over two million people have benefited from the scheme to date.

The way it works is by using a person's earnings to wipe out personal debts, following a strict method that can save on interest payments. By following a set system, which Mr Cummuta's company can help implement, people can be free of debt quicker than they would ever think.

Transforming Debt into Wealth "has proven to be a fast-lane escape route for hundreds of thousands of hard-working income earners, who had been passing on all their wealth to their creditors, month-by-month, paycheck-by-paycheck", according to the website.

People who use the program have been "eliminating their creditors" after each month and every paycheck, creating wealth for themselves in the process, it adds.



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Measures brought in aim to allow for a "viable" sector, while at the same time look after citizens'’ needs.

Stan Keyes, president of the Canadian Payday Loan Association (CPLA), said the legislation is and important move towards protecting consumers in Ontario.

"The CPLA will continue to be an industry leader in protecting consumers and will participate actively in the rate-setting process for this mainstream, convenience financial product," he remarked.

He added that all regulations need to ensure consumers are protected, as well as sustaining a competitive industry.

Last fall, the CPLA published research that claimed pay day loan customers in Ontario were well educated and informed.

The study revealed that those who take out short-term loans "deliberately choose" to do so instead of getting money from banks and credit unions, and know what they are doing with the product.


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According to DebtHelpExperts.com, there are a number of solutions to getting out of financial difficulty.

This advice is relevant to a number of Americans, including those with mounting bills, increasing credit card repayments or people facing bankruptcy, reports ARA.

Highlighting how widespread the debt problems are in the US, the company states: "Everywhere you look you see news about the credit crunch and the mortgage foreclosure crisis and - if you're like most Americans - you're feeling the pinch too."

A few thousand dollars on a student loan may feel like a challenge to pay back, but with the right attitude and regular repayments, the debt will be cleared, the financial firm advises.

Last weekend, gas prices in America went over $4 per gallon for the first time ever. Everyday expenses such as this are contributing to a tough financial climate for many citizens in the US.


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Unemployment is now at its highest level since October 2004, the Department of Labor statistics reveal.

Americans struggling to make ends meet may find that short term loans help them pay for essentials items in times of financial difficulty.

The increase in jobless rates over the course of the last two months was the biggest one-month hike in more than 20 years. February 1986 was the last time this monthly figure was at such a high level.

Some 49,000 jobs were cut between April and May, while payrolls have been reduced for five consecutive months, according to the Associated Press.

"For the average American there is not debate that the economy is in a recession," Mark Zandi, chief economist at Moody's Economy.com, told the news agency.

"That's because their net worth is lower, their purchasing power is lower and it is tough to find a job."

He added that people who lose their jobs are finding it "tough" to get back into employment.

Media reports suggest that Hispanic people have been hit particularly hard by job losses.



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The figure of 56.7 percent in June dropped from last month's 59.8 percent and is the lowest-recorded confidence level since May 1980's 51.7 percent - the lowest ever mark.

This news comes as no real surprise, with American citizens dealing with spiraling fuel costs, higher-than-average gas prices and lower weekly earnings.

Indeed, Department of Labor research released today shows that the price of gas has risen 5.7 percent in recent times. Food prices have also reportedly been on the up, which will not be welcomed by US citizens already in debt.

America's total debt is said to be more than $53 trillion and is rising each year.

Earlier this week, an Associated Press-AOL poll claimed that people in debt are more likely to suffer from a variety of ailments than people who are financially secure.


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The newspaper conducted a poll about the standard and future standard of living in America, and 54 percent indicated that their standard of living is not better than it was in 2003.

In total, 45 percent of survey respondents felt that their children will be able to live more comfortably than they do now.

"I don't think it is going to be as easy for them. They're going to have to pay back a tremendous debt load ... I just don't see the opportunities being there," Matt Gwynne, a 63-year-old retired executive from Angier, North Carolina, told the publication.

USA Today will be looking at how the Americans and the US economy "are not advancing" in feature articles in the forthcoming months.

Professor of economics at Southern State Community College Bill Horne, writing in his column for the People's Defender last week, said gas prices, rising food prices and increasing energy bills were all contributing to more-difficult living for Americans.


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The newspaper reports that more people are buying and pawning in Alachua, Florida, than before in light of the current economic slump.

With summer approaching, more of this activity is expected as people play more and work less.

At least that is the opinion of Chris Mack, manager of Alachua Pawn and Jewelry in the county, which has reported strong business in recent weeks.

"A lot of my customers need $25 or $30 to fill up their [gas] tank or just $5 to buy a pack of cigarettes," he told the newspaper.

Those who do not want to pawn their goods may wish to consider a pay day loan - as this can help people struggling to make ends meet at the end of the month.

Gas in the US went past $4 per gallon earlier this week, which may be having an affect on Americans' spending budgets.

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Findings from an Associated Press (AP)-AOL Health poll indicate that 44 percent of those reporting high levels of debt stress suffered from migraines and headaches.

This figure compares to the suggestion that 15 percent of the US population who consider themselves to be financially healthy are affected by the same ailments.

AP and AOL also found that 27 percent of people stressed out by their money situation had ulcers, compared to eight percent of Americans who are not overly concerned by their finances.

Citizens in debt are also more likely to have heart attacks, severe depression or anxiety than those not in economic dire straights, according to the poll.

Department of Labor statistics released last week also portrayed a negative image of the US economy. The figures indicated that unemployment in the US is now at its highest rate since October 2004.


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Prices could increase further still in the coming weeks, as crude oil fees continue their upward trajectory, reports the Associated Press (AP).

Yolanda Cade, managing director of public relations at automobile club AAA, indicated that American drivers are likely to have to pay more for their fuel, although gas retailers have been warned about their conduct in the current economic climate.

"We've cautioned gasoline station owners against not recklessly increasing retail prices just because of one big jump in the crude market," the AP reported Ms Cade as saying.

Referring to the new price-per-gallon figure, she added: "One day of trading doesn't constitute a market trend."

Chairman and member of the Board of Governors of the Federal Reserve System Dr Ben S. Bernanke said last week that Americans will have to deal with falling house prices and higher energy costs in the coming months.


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