All eyes and ears have been fixed on the economy for quite some time now. Many think that Barack Obama will turn things right around as soon as he takes office. However, even he is not so sure. But, despite the economic signs of 2008, 2009 is expected to be a much better year. Here’s why.

Decreasing Oil Prices

Do you remember when oil hit $147 per barrel? It wasn’t that long ago. Currently, oil is only about $45 per barrel. Global demand for oil has dropped significantly. Gas prices are currently $1.61 per gallon around the country. Some experts think that the price of a gallon of fuel will soon drop to only $1 per gallon. Oil prices weren’t nearly this low at the beginning of 2008. It is a great sign that gas prices have dropped so significantly.

Mortgage Rates

Mortgage rates are falling as fast, if not faster, than energy prices. The Federal Reserve has pledged to purchase millions of dollars in mortgage securities. Thus, mortgage rates continue to fall. The average rate for a new mortgage loan is now only 5.26%. Economic prosperity is in the forecast for 2009 thanks to falling mortgage rates.

The Federal Reserve

The Federal Reserve has been working tirelessly to get this country’s finances back on track. The Federal Reserve has pledged to do anything to “strengthen the economy.” Short term interest rates have already been pushed close to 0%. The actions of the Federal Reserve have gone a long way in preserving and restoring the United States’ economic situation.

Barack Obama’s Stimulus Plan

The Obama administration plans on spending between $750 billion and $1 trillion over the course of the next two years. Most of this money will be spent on rebuilding American infrastructure. This would include everything from green technology to transportation and beyond. Millions of jobs will also be created. Barack Obama’s revised stimulus package is credited with helping to get the economy back on track.

Deep Fundamentals

America is still considered to be a leader when it comes to fundamental strength. Innovation, a flexible labor market and higher education are ranked among the highest of America’s strengths.

When it comes down to it, America is in better shape than everyone thinks. We are certainly doing better than we were back in the 70’s. America has overcome many challenges in 2008 and is expected to do so again in 2009.

Retail sales numbers for Black Friday this year gave many retailers hope that the holiday shopping season would not be as bad as expected. However, the rest of the holiday shopping numbers didn’t do so well. To entice shoppers into their stores, many retail stores had similar or identical deals as those offered on Black Friday. Unfortunately, those deep discounts didn’t help out retailers much in what amounted to a very dismal holiday shopping season for 2008.

If you chose to wait for after-Christmas sales, got gift cards or cash and plan to do some shopping - you are in luck! Many top retailers have slashed prices on already deeply discounted items even further and we are not talking about Christmas ornaments or that ugly sweater you got. We’re talking about further price reductions on brand-name apparel and even high-end electronics. Be sure to check out sale prices from Macy’s, Target, Walmart, Sears, Circuit City and more.

Don’t worry about big crowds either as recent weather conditions (snow) throughout most of the country and with many people heading back to work today, there won’t be much competition. You most likely be able to find exactly what you want without much hassle in the store or online.

Get out there, save (& spend) some money and don’t forget to use a reward credit card on every purchase!

The American economy is struggling in more ways than one. Americans around the country are having a hard time making minimum payments and mortgage payments. Everyone has seemingly “tightened their belts.” Out of all of the bills out there, which one is taking the biggest hit? Credit cards.

The number of two-month credit card delinquencies has risen 24% since August. More and more consumers are finding themselves unable to pay simple credit card bills. These consumers don’t expect to get out of this bind anytime soon.

Retailers and merchants are already feeling the nationwide pinch. Consumers have stopped spending money. However, as the number of credit card defaults continues to rise, the situation will only worsen.

Recent statistics show us that approximately one in every eight credit card holders is in trouble. One in eight card holders will likely default on a department-store-issued credit card. The Fitch Retail Credit Card Index predicts more charge offs in the near future. Charge offs are debts that are deemed to be “uncollectable”. Fitch expects the number of charge offs to surpass 12% in the first half of 2009. The number of current charge offs is already 40 percent higher than the highest levels in 2007.

There is a bit of surprising news however. The Fitch Index reports that retail credit card portfolios remain healthy. How could this be when the number of defaults has escalated so much? The interest rates that are being charged to consumers exceeds the number of charge offs. Thus, the “healthy” retail credit card portfolio status.

So, how reliable is the Fitch Retail Credit Card Index? Well, it tracks more than “$72 billion in principle receivables backing approximately $40 billion of retail or private label credit cards.” Citibank Omni Master Trust and GE Private Label Master Trust are the largest issuers in Fitch’s Index. Some major retailers that are included in the Index are: Wal-Mart, Home Depot, Inc., J.C. Penny Co. Inc., Best Buy Co, Sears Holdings Corp.

Consumers around the country have found themselves strapped for cash these days. The credit crisis hasn’t made it much easier, until now.

New regulations are going to be presented by the federal government in the upcoming weeks. These regulations will restrict any and all credit card practices that are seen as unfair or deceptive. Credit card regulation proposals have included a number of different restrictions. These restrictions include prohibiting:

• - Increasing interest rates on an outstanding balance (except under limited circumstances)
• - Applying payments to the minimum payment to maximize interest charges
• - Requiring a reasonable amount of time for consumers to make payments

Consumers have played a big part in getting the feds to listen. Thousands and thousands of comments have been posted on the Federal Reserve’s website. These consumers have begged and begged the government to place tighter restrictions on credit card practices.

The credit card industry, as a whole, is extremely skeptical about the new regulations. It is concerned that each regulation will prohibit its ability to manage risk. This could cause credit card companies to be forced to raise interest rates and decrease the amount of available credit. Meredith Whitney, a well-known credit analyst recently predicted that the rules would decrease credit lines to 40 percent.

She said, “With so many Americans relying on their credit cards as a major source of liquidity, it would be equivalent to a major pay cut.”

The major problem right now is that the rules and regulations have not been finalized. However, the industry predicts that the Federal government will act aggressively.

Ken Clayton, the managing director of the American Bankers Association’s card policy council, said, “What you’re going to see is an unprecedented change in the way consumers deal with their card companies. In light on the current economic uncertainties, it’s important that all of us understand the full impact of these regulations on consumers and the economy before we can understand [whether they are] successful.”

Credit card companies have protested several of the possible regulations. For instance, credit card issuers do not agree that there should be regulations put in place that would prohibit increasing the interest rate on outstanding balances. Past proposals would allow exceptions to the rule (namely, when a minimum payment is not received until 30 days past the due date. However, the industry argues that 30-days for a delinquency is already too long.

The fact of the matter is that nothing is certain yet. The Feds are feverishly working on the regulations and should be releasing those regulations soon. As a consumer, you can sit back and take a deep breath knowing that your end of the bargain is about to be loosened.

There has been a lot of skepticism about this year’s holiday shopping season. Skepticism has come from retailers and consumers alike. But, the outcome from Black Friday and Cyber Monday should put every one’s fears at ease.

Polls showed that consumers were planning on spending a lot less this year. However, polls show people’s intentions, not their actions. As a society, we often act differently (especially when it comes to spending money) than we intended. There are three main reasons why people acted differently than their intentions predicted…

1. It’s for the kids! Parents and other adults seem to deprive themselves so that they can give to the kids. It often means us going without so that the kids can have the latest and greatest toys.

2. Frugality. There seems to only be so much frugality that people can take. Consumers get tired of deprivation. This deprivation leads people to to splurge and sometimes go overboard.

3. Math skills. Many people think they are getting great deals until they stop to actually add up the math. Many consumers do the math too late and end up making mistakes when it comes to holiday shopping.

Here are some helpful tips for smarter holiday shopping this year.

1. Check it out - Retailers can be tricky and crafty. They have to be, especially in today’s economy. Be careful when doing your holiday shopping. Do your research and make sure you aren’t buying the same things over and over and over.

2. Make a list - If you tend to forget about the gifts you’ve already purchased, go ahead and make a list. Lists can prevent you from overspending and help you prioritize.

3. Cost vs. Value - Sometimes it pays off to spend a little bit more money. Check out the quality. Would it be worth it to spend $5 extra for the one you know is going to last?

4. Know your rewards - Before doing any holiday shopping, review the reward benefits for all of the programs you are a member of; MyPoints, InboxDollars, AMEX, etc. It really pays off to review the reward options for each store before making any purchases.

5. Compare, compare, compare - Just because you think something is a great deal, you should still do a little bit of research first. It is safe to assume that anything that is really cheap is the lowest-end quality. Do your research before spending any of your hard-earned money.

6. Don’t rationalize - Don’t give yourself a guilty conscience just because you bought yourself a sweater. It is also important to realize that you can’t buy everything on your list. Your loved ones can’t have EVERYTHING they want. Count your blessings instead of rationalizing.

7. Keep your perspective - Perspective is the most important thing to have this holiday season. Keep in mind that the people on your list are going to be thrilled to get whatever you got them. If you don’t buy it, they certainly can’t miss it.

These tips are sure to come in handy this holiday season. The most important thing to remember is that you can make a lot more out of your holiday shopping if you do your homework and stay informed.