Today the government announces that it would provide up to $800 billion to unfreeze consumer credit. The financial crisis has spread from Wall Street to Main Street. Student loans, auto loans and credit cards have been much harder to come by because of the crisis. Credit card companies are raising interest rates, cutting credit limits and raising minimum payment from 2% to 5%.
Consumers this year are not spending as much money on their credit cards as they have in previous years because of reduced credit limits and higher interest rates. More people this year will be buying holiday presents using either cash or debit cards. In order to alleviate the situation the government will spend $200 billion for consumer credit.
All these billions of dollars that are being spent on bailouts are supposed to help get our economy out of the biggest financial crisis since the Great Depression. Our national economy is based on people’s abilities to borrow and repay loans. Consumers who are making large purchases usually require credit in order to make those purchases. It is not uncommon for someone to purchase a $1000 or more television set on their credit card. Retailers relay on credit cards to increase sales. If consumers are denied credit then spending will slow down and the economy will suffer even more. Consumer spending is the lowest it has been in almost five decades.
It will be up to the Obama administration to stimulate the economy and keep the nation from going into another depression. It is quite obvious that we are in a major recession, but with action, our economy will pull through. According to recent news, Obama will unveil a stimulus package that includes rebuilding our national infrastructure. Public works programs will employ thousands of workers who have lost their jobs. These people will turn around and continue to spend money, make mortgage payments and be able to pay their credit card bills as well.
Our country has been through many troubled financial situations throughout history. In 1974 unemployment was at 11.5 percent. In 1983 unemployment was at 8%. No matter how bad off things have gotten, the United States always manages to pull through. We are a resilient country that can survive almost anything that comes are way. The stock market goes up and down, yet people continue to start new companies, build new buildings and prosper without regards to the DJIA.
It was the United States that created the internet. During the 1990s we experienced years of prosperity because of the dot com era. The dot com bubble did burst, yet the technology that was created during that time moves our economy today. Companies like Google and EBay have transformed the way we do business. There are many who feel that our economy is headed for doom and gloom with no end in site. However, there are those that believe our economy will eventually triumph. I am of the belief that we will come out a stronger country because of this recession. Perhaps, we will experience on day an energy boom created by new technologies. These new energy technologies will in turn create jobs and spark another boom era; and the economic cycle will start all over.
Consumers this year are not spending as much money on their credit cards as they have in previous years because of reduced credit limits and higher interest rates. More people this year will be buying holiday presents using either cash or debit cards. In order to alleviate the situation the government will spend $200 billion for consumer credit.
All these billions of dollars that are being spent on bailouts are supposed to help get our economy out of the biggest financial crisis since the Great Depression. Our national economy is based on people’s abilities to borrow and repay loans. Consumers who are making large purchases usually require credit in order to make those purchases. It is not uncommon for someone to purchase a $1000 or more television set on their credit card. Retailers relay on credit cards to increase sales. If consumers are denied credit then spending will slow down and the economy will suffer even more. Consumer spending is the lowest it has been in almost five decades.
It will be up to the Obama administration to stimulate the economy and keep the nation from going into another depression. It is quite obvious that we are in a major recession, but with action, our economy will pull through. According to recent news, Obama will unveil a stimulus package that includes rebuilding our national infrastructure. Public works programs will employ thousands of workers who have lost their jobs. These people will turn around and continue to spend money, make mortgage payments and be able to pay their credit card bills as well.
Our country has been through many troubled financial situations throughout history. In 1974 unemployment was at 11.5 percent. In 1983 unemployment was at 8%. No matter how bad off things have gotten, the United States always manages to pull through. We are a resilient country that can survive almost anything that comes are way. The stock market goes up and down, yet people continue to start new companies, build new buildings and prosper without regards to the DJIA.
It was the United States that created the internet. During the 1990s we experienced years of prosperity because of the dot com era. The dot com bubble did burst, yet the technology that was created during that time moves our economy today. Companies like Google and EBay have transformed the way we do business. There are many who feel that our economy is headed for doom and gloom with no end in site. However, there are those that believe our economy will eventually triumph. I am of the belief that we will come out a stronger country because of this recession. Perhaps, we will experience on day an energy boom created by new technologies. These new energy technologies will in turn create jobs and spark another boom era; and the economic cycle will start all over.
Labels: business credit cards, consumer bailout, credit cards
Credit Card / Financial news blog post by Todd Holliday at 8:38 PM 