Holiday spending may be great for online retailers, but it disappointed many brick and mortar retailers. These stores not only lost sales to the internet, but also had to combat lower consumer spending amid a tough credit and housing market. Many customers that tapped home equity lines are switching to credit cards and reducing their spending. It will be interesting to see whether the default rates on any of the store-based credit cards increase along with the default rates associated with the larger credit card banks...

From the New York Times:
American consumers, uneasy about the economy and unimpressed by the merchandise in stores, delivered the bleak holiday shopping season retailers had expected, if not feared, according to one early but influential projection. Spending from Thanksgiving to Christmas rose just 3.6 percent over last year, the weakest performance in at least four years, according to MasterCard Advisors, a division of the credit card company. By comparison, sales grew 6.6 percent in 2006 and 8.7 percent in 2005.

Did you spend hours in line at retailers this Christmas? It turns out tha many people simply turned to websites like Amazon.com in order to get their holiday shopping done from the comfort of their own home. Amazon called this season its best ever and released some interesting statistics:

Amazon Worldwide 2007 Holiday Facts (Includes www.amazon.com, www.amazon.co.uk, www.amazon.de, www.amazon.fr, www.amazon.co.jp, and www.amazon.ca)

• Amazon shipped more than 99 percent of orders in time to meet holiday deadlines worldwide.
• On the peak day this season, Amazon's worldwide fulfillment network shipped over 3.9 million units.
• Amazon shipped to over 200 countries.
• One of our most remote shipments was “Full Metal Panic Fumoffu - Full Metal Pandemonium” (Vol. 1) DVD and “Full Metal Panic Fumoffu - Full Metal Fracas” (Vol. 2) DVD delivered to Barrow, Alaska.
• Amazon shipped over 160,000 shipments to APO/FPO addresses.
  

Amazon.com 2007 Holiday Facts (www.amazon.com Only)

• Amazon.com sold Nintendo Wii systems at approximately 17 per second when they were in stock.
• Amazon.com sold enough high-def DVD players to cover seven football fields.
• If you lined up all of the GPS units Amazon.com sold this holiday, they would make a trail from New York to Philadelphia; however, a new trail wouldn’t be necessary with the use of a GPS.
• Amazon.com sold enough auto wrenches to stretch all the way around the Daytona 500 track.
• Amazon.com sold enough Hannah Montana wigs to outfit the entire audience at her December 20th show in Providence, RI.
• Amazon.com's One-Day Shipping was extended an extra day through Sunday, December 23rd for Prime members this holiday season.
• The last Prime order placed on December 23 in time for Christmas delivery contained "Futurama, Vol. 1" DVD, "Lost in Translation" DVD, "A Charlie Brown Christmas" CD, "The Fountainhead" by Ayn Rand paperback, "Bridge Over Troubled Water" CD, and "Pulp Fiction” (Two-Disc Collector's Edition) DVD delivered to Herndon, VA on December 24th.
  

Amazon.com's Hot Holiday Best Sellers (Nov. 15 through Dec. 19 Based on Units Ordered)

• In Toys, top sellers included Jakks EyeClops Bionic Eye, IlluStory Make Your Own Story Kit and Spinmaster Air Hogs Havoc Heli.
• Top sellers in video games and hardware included Nintendo Wii, “Super Mario Galaxy” and “Call of Duty 4.”
• In DVDs, top sellers included “Harry Potter and the Order of the Phoenix,” “Planet Earth: The Complete BBC Series” and “Pirates of the Caribbean: At World's End.”
• Top sellers in books included “Eat, Pray, Love” by Elizabeth Gilbert, “The Dangerous Book for Boys” by Conn Iggulden and Hal Iggulden and “I Am America (And So Can You)” by Stephen Colbert.
• In music, top sellers included “Noel” by Josh Groban, “Raising Sand” by Robert Plant and Alison Krauss and “As I Am” by Alicia Keys.
• Top sellers in consumer electronics included the Garmin GPS, Canon PowerShot digital Elph cameras and Samsung LCD HDTVs.
• Top sellers in the Beauty Store included Burt's Bees Head to Toe Starter Kit, Imju Fiberwig mascara and Bare Escentuals Get Started Kit.
• In PCs, the top sellers included Apple MacBook, Nokia Internet Tablet PC and HP Pavilion Entertainment Notebook PC.
• Popular shoes and handbags at Amazon.com and Endless.com included the FEED bag, FRYE women's Campus tall boot and FRYE women's Adrienne Button tall boot.
• Top sellers in apparel and accessories included Kenneth Cole Reaction men's Eden wool pea coat, Gruppo Italiano women's cashmere-lined leather glove and Red Moon women's long sleeve cashmere turtleneck.
• The top-selling products in Amazon's Automotive Parts & Accessories Store included Black & Decker Simple Start battery booster, Actron diagnostic code scanner and Highland waterproof car top carrier.
• Top sellers in home improvement included Black & Decker auto wrench, Black & Decker Gecko grip level and Leatherman Micra multitool.
• The top-selling items in the Sports and Outdoors Store included the Ripstik caster board, Perfect Pushup and Bowflex Series 7 treadmill.
• Jewelry top sellers included sterling silver open double flower pendant, sterling silver Filigree circle pendant and 14k yellow gold four prong oval peridot stud earrings.
• Top-selling watches included the Timex heart rate monitor watch, LEGO Kids' Star Wars Darth Vader watch and Skagen women's Silver Dial mesh bracelet watch.
• The top-selling home and garden items included KitchenAid stand mixers (various colors), Pinzon Microtech throw (various colors) and Foreman removable-plate grills.
• Top-selling items in the Baby Store included Munchkin Mozart Magic Cube, Lamaze Spin & Explore Garden Gym and Lamaze Musical Inchworm.
• Top-selling items in Amazon's Grocery Store included Numi's Bouquet bamboo gift set, Lavazza Crema e Aroma coffee beans and Senseo Douwe Egberts dark roast coffee pods.
• Top-selling items in Amazon’s Gourmet Food Store included Soup's On gift basket by Wine Country Gift Baskets, Starbucks assortment gift basket by Wine Country Gift Baskets, and Fireworks popcorn and seasoning set.
• Top-sellers in health and personal care included the Braun Pulsonic system with LCD screen, Farouk CHI ceramic flat hairstyling iron and Homedics Therapist Select quad-roller massaging cushion with heat.
  

The consumer credit markets may be the final nail in the coffin for the US economy, sending it into the recession that so many economies were predicting. Problems began in 2005 when the US reformed its bankruptcy laws and made it more difficult to file. This resulted in fewer defaults, which meant that lenders could afford to send more money to questionable borrowers. Unfortunately, this caused a bubble in both the mortgage and consumer credit markets and only one has exploded so far... Rising defaults in the consumer credit markets may be a signal that we are at the crest of a new wave of problems for financial institutions in the US.

From the AP:
Americans are falling behind on their credit card payments at an alarming rate, sending delinquencies and defaults surging by double-digit percentages in the last year and prompting warnings of worse to come. An Associated Press analysis of financial data from the country's largest card issuers also found that the greatest rise was among accounts more than 90 days in arrears.

President Bush signed a new bill today that will give tax relief to families facing foreclosures. The driving force behind this plan is a strategy designed to incentive lenders to refinance bad loans instead of simply "call" them. That is, those with subprime adjustable rate mortgages will be eligible for a refinancing at a lower rate rather than simply put into foreclosure. It's a good move that could help curb the problems we are seeing today with foreclosures, but many more near-prime and prime mortgages may still see problems.

From AHN:
President George Bush on Thursday signed a bill allowing families facing foreclosure from paying higher taxes, months after the U.S. housing market began its steep decline. The Mortgage Forgiveness Debt Relief Act of 2007 gives homeowners a 3-three-year window to refinance their mortgage while enjoying a tax break. The current tax code recognizes debt relief obtained from refinanced mortgages as taxable income. The new law, which was sponsored by Sen. Max Baucus (D-MT), chairman of the Senate Finance Committee, increases incentives for lenders and homeowners to refinance bad loans.

Consumers may finally receive a break after the European Union ordered MasterCard to drop its international fees for cross-border purchases or face steep fines amounting to 3.5% of global revenues daily. The move comes as the EU is attempting to make all transactions across its borders free from any fees or extra charges. While this is only one fee being dropped, it is definitely one of the more expensive fees for those living in Europe or traveling abroad.

From the WSJ:
Credit-card company MasterCard Inc. must drop the fees it charges stores for cross-border credit card purchases within six months or face massive daily fines, the European Commission ruled Wednesday. The charges are incompatible with European Union antitrust rules, the commission said. The fees charged on payments customers make abroad with MasterCard credit cards or Maestro debit cards inflate the cost of card acceptance for retailers, said Competition Commissioner Neelie Kroes.

Call 866-559-DEBT for a free debt settlement consultation today!

America's consumer debt problem may seem like a huge problem, but it's quickly becoming a worldwide problem. The UK reported not long ago that they were seeing record levels of insolvancy as credit card companies worldwide make a push to get consumers more and more into debt. Unfortunately, the problem is only likely to compound as lenders becoming increasingly tight with their lending standards. The best thing for consumers to do now is work to overcome their debt problems by seeking help to keep current on due debts and work to repay old debts.

From the Guardian:
Millions of Britons are trapped in a cycle of debt, using their credit cards to fund Christmas purchases before they have even repaid last year's spending, a survey claimed today. Around one in 10 consumers - the equivalent of 4.4 million people - admit they are still repaying debt they ran up last December ... At the same time, 9% of people said it took them five months to clear their festive credit card bill, according to financial website MoneyExpert.com ... More than a quarter of these people plan to borrow money from friends and family members, while one in five will take out an additional loan.

Call 866-559-DEBT for a free debt settlement consultation today!

Most people are aware of the problems with the mortgage markets, credit markets and consumer spending but there may now be more things to consider on the horizon. Business capital spending may start to decline now that credit is a lot tougher and revenues are taking a hit. Meanwhile, overseas growth appears to be slowing down and may not be great enough to offset the slowing domestic growth. These could very well be the key ingredients to a recession next year...

From Reuters:
"U.S. employers have yet to slash jobs in any great number and the mighty consumer hasn't forgotten Christmas, but Corporate America is retrenching in anticipation of a slowdown, and that may hasten the fall. While malls are packed with holiday shoppers, the import docks in California are quieter than usual as retailers trim inventory. U.S. airlines are flying with the fewest empty seats on record, yet many are cutting capacity. Some economists worry that it will be this scale-down in business investment that tips an already wobbly U.S. economy into a recession next year."

How often have you seen offers that guaranteed lower monthly credit card and loan payments? It’s a tough offer to refuse if you are deep in debt, especially since you know non-profit company isn’t trying to make a buck off of you… or are they?

Many con artists run debt relief organizations that do not deliver on their tall promises to reduce your debts by more than half. They use attractive advertising to draw customers into a program that can set them back hundreds of dollars without making any further progress to reduce their debts. These fraudulent providers are not really non-profit at all.

It is important that consumers carefully verify that any institution that they are dealing with is reputable. This can be done by checking their status with the Better Business Bureau or other industry organizations. Legitimate counselors will also sit down with you and conduct an initial free and objective assessment of your financial situation. It is important to shop around and make sure all the good ones are making the same recommendations.

Many credit card companies may also be willing to negotiate with you directly; however, this can be difficult at times. Debt settlement companies offer a better solution that can help you consolidate and reduce your debts for a low fee. These companies can typically reduce your debts by as much as 50% by working with your creditors. We recommend Knockout Debt that can be reached at 866-559-DEBT.

One of the best ways to have more money is to limit your spending, especially during this time of year when we are accustomed to spending so much. Here’s a simple process that you can use to limit your spending and increase your cash on hand:

1. Examine. Take out a calculator and figure out exactly how much you owe, except for your mortgage. Now, subtract the indulgences that you could get rid of without much trouble. For example, do you really need those chocolate chip cookies? Probably not. Also, resist the temptation to purchase these items during your next trip to the store – stick to your list!
   
   
2. Cut Back. Now, stop all unnecessary spending and focus on paying down the amount that you owe on loans and debt. Make it into a game: How quickly can you pay down your debts? This phase won’t last forever, but it’s one of the most important steps in the process.
   
   
3. Plan. Now that you have cut all of the unnecessary items from your shopping list, you can return to business as usual – except with a plan! Divide your cash into three piles: (1) short-term fun spending, (2) medium-term planned expenses for food, living and big purchases, and (3) long-term retirement funding so you won’t have to work forever.
   

Following these three easy steps can help you reduce the amount of money you owe and prevent problems in the future by establishing a spending plan to curb your consumption. Get started today!

Need debt settlement help? Call 866-559-DEBT (3328) today for a free consultation!