Consumers aren’t the only ones feeling the credit crunch these days – credit card companies are also hurting for cash. Rising defaults and tighter debt markets have caused credit card companies to make several changes to cover themselves. The most recent: Cutting spending limits on credit cards.

Some consumers may be caught off-guard this holiday season as credit card companies slash credit card limits, often without warning their customers. American Express, Bank of America, Citibank and Discover are among the major credit card issuers taking such actions.

So, who is at risk of having their limits slashed? The first targets will likely be those who have high balances along with those who have low credit scores and are not paying their bills on time. These high-risk accounts can quickly cause problems for issuers if they default.

However, the unprecedented crisis is also causing problems for many consumers with good credit ratings. This means that credit card companies may also begin to target these consumers that they perceive as high-risk in today’s environment. As a result, consumers should keep their balance 30% lower than their limit to reduce the odds of such reductions.

The other key thing for consumers is to check these limits on a regular basis. Accidentally going over the limit on a credit card can spur a substantial amount of fees and charges. Consumers that already hit this wall may want to call up their credit card company saying that they didn’t know it was lowered.

The real estate market is the source of many problems for the U.S. economy and things aren't improving much. The U.S. Centus Bureau released new numbers today showing homes sales that inched higher over August's lows, but remained the worst since 1981 in September. Meanwhile, the prices of those houses have hit 2004 levels as sellers continue to accept lower and lower figures to unload their houses.

Home builders have reduced their production to reduce inventory and stabilize prices, but there were still around 394,000 new single family residences on the market at the end of September. At the current pace, it would take just over 10 months to sell through that inventory and turn the economy. The median selling price for a new home fell to $218,400 from $221,900 in August while the mean selling price was up from $263,900 to $275,500.

It is also worth noting that the true price declines are probably even higher than the numbers. Some 65% of homebuilders surveyed by NAHB reported offering customers free upgrades such as marble countertops. Other incentives include paying closing costs and buying down the interest rates. It is also worth noting that the additional sales occurred primarily in the West; the north-eastern US saw a 21.4% drop while the Midwest saw a 5.8% decline.

Unfortunately, the number of unsold new homes, standing at 394,000 at the end of September, remais near historic highs as the number of US home foreclosures added more properties to the market. In the end, these trends will likely take some time to reverse.

The majority of the costs in our lives are household convenience items that we purchase at a gas station or nearby retailer without regard for cost. The first step in reducing these costs is to keep an inventory of everything in your house to know when you're about to run out, so you have time to run to a cheaper outlet without making a special trip. The second step is to know where to shop to get the best deals. This article will address both of these issues to help you save money!

Step 1: Keep an Inventory

When you have to make a special trip for a household items, there are two big costs involved. First, you are forced to spend the gas money associated with driving to and from the store (not to mention your time!). Secondly, you often end up going to more expensive places for the goods, such as gas stations or small convenience stores. These costs can quickly add up despite the fact that they can be easily avoided through planning - just be mindful of everything in your house and the amounts you have left.

Step 2: Shop Intelligently

One great place to save money is your local dollar store. Dollar stores have many household items that can cost substantially more in a larger retailer. Things like laundry detergent, dish washing soap, hand soaps, mops, silverware, plates, cups and other items can be purchased for merely a dollar. These same items can be 100% or more of that price in other retailers. This may not seem like a lot, but when you purchase a lot of these, you are reducing your shopping bill by 100%+! It adds up...

People often do not realize how much they spend on convenience items and those amounts can add up quickly. Following these simple steps can help you save a lot of money!

Consumers are more depressed about the economy than ever before. The University of Michigan's famous Consumer Sentiment Index fell to 57.5 this month from 70.3 just one month ago! The drop is the single largest in the history of the survey as consumers are finding themselves saddled with debt and unable to pay their bills while costs continue to spiral higher.

The same measure averaged 85.6 last year, but began a steep decline as the economy deteriorated. Tightened credit has led to a further decline in the three-year real estate recession that has caused all of the problems. More and more Americans are finding themselves paying a mortgage on a house that's no longer worth as much as they are paying. Many have therefore stopped.

Foreclosures also continue to rise as Americans simply cannot afford to keep making their housing payments. Banks can't afford to foreclose on these houses fast enough as their own problems continue to mount. Investors who funded these mortgages are no longer interested in making loans. And the market has essentially stopped dead in its tracks.

Government interventions have attempted to free up the market by injecting cheap cash that banks can loan to start making higher interest loans again. However, banks remain nervous as consumers continue to default, even with the cheap credit. The two largest institutions, Fannie and Freddie, are both now owned by the government. There's no end in sight.

However, the storm is always darkest before the sun shows. This terrible economic environment has created a lot of opportunities for investors. U.S. stocks are cheap and many great investors like Warren Buffett are finally stepping up to the plate. Meanwhile, housing prices are at record lows for those looking to buy a new house and lending rates will be cheap when the market reignites.

Consumers should focus on settling their debts now while banks are in trouble and eager for any resolution. They should also be looking at acquiring stocks on the cheap and saving for their future. Now may be a time to rebuild instead of a time to mourn...

The Federal Reserve announced that it would double its auctions of cash to banks to as much as $900 billion and is considering further steps to unfreeze short-term lending markets as the credit crunch deepens. Meanwhile, lawmakers just passed a $700 billion bill designed to purchase toxic debt from troubled banks. But where does all of this money come from? The printers of course!

Unfortunately, not even printing money is free as many countries like Zimbabwe could tell you. The more money you print, the less the money is worth. Simple supply and demand economics. So, while the US is printing all of this money to bailout the financial sector, the value of the dollar will fall as more of them hit the world markets.

A lower dollar value is good and bad news. The good news is that US goods are cheaper for foreigners, which means that exports tend to rise. This is exactly how China's economy grew so fast. The bad news is that foreign goods and raw materials cost a lot more for US consumers, so everything becomes more expensive - bad news with high unemployment and record debts.

So, how can you avoid these problems. Well, one way is to keep your money in inflation protected securities, known as TIPS. These are government bonds that protect your money against inflation. Another way is to invest in foreign assets that may benefit from the cheap prices or even purchase US assets on the cheap yourself (such as US blue chip stocks).

Unfortunately, food prices are likely to continue rising, but with your money protected, it will cost roughly the same over the long run. Meanwhile, investing in cheap US assets now could pay dividends down the road when the economy recovers.

Worried about the crisis on Wall Street? Luckily, there are a few things you can do to protect your finances amid the storm!

1. Check Your Bank Accounts - Many banks are federally insured through the Federal Deposit Insurance Corporation (FDIC), but there are some banks that aren't insured. It is important to make sure that you are so you aren't at risk if your bank goes bankrupt!
2. Check Your Brokerage Account - Many brokers are also federally insured through the FDIC, but again not all of them. Brokers are finding themselves in just as much trouble as banks, so it's important to check so you aren't at risk if your broker is in trouble too!
3. Cash is King - The montra used by hedge funds around the world right now is also true for individuals. Interest on bank accounts like ING Direct and HSBC are paying a healthy 3% or so, which is much better than many investments! Perhaps its time to keep more of your money in cash...
4. Don't Speculate - Huge banks and corporations are trading at in the pennies right now after collapsing. Stocks like Freddie Mac and Fannie Mae as well as Lehman Brothers may seem cheap, but buying penny stocks like these are not a good idea! These stocks are now worthless - the only traders are dreamers!
5. Don't Panic, The World's Not Ending - Experts on Wall Street know that the best time to buy is when everyone is selling. Right now, everyone is panicing and selling. Instead, investors should hold onto their investments and keep buying stocks now while they are low instead of later when they recover!

The credit crisis may have began in the United States, but it is quickly spreading to the rest of the world. A recent study by PayPal showed that 20 percent of Britons use their credit cards to "take them out of trouble". Money High Street reported that 15.9 million Brits regularly go over their monthly budget by up to £123. However, unlike the United States, credit card companies in Britain are taking action. The number of credit card rejections was up 17% compared with the six month period to March 2007.

The UK economy is now shrinking and is expected to continue into next year, according to the Organization for Economic Cooperation and Development. The event marks the first time that a major international forecaster has explicitly said that Britain is facing a technical recession, which involves the economic contracting for two successive quarters. It is also the onl major economy in the world that will face a recession in the next six months.

According to the report, "Continued financial turmoil appears to reflect increasingly signs of weakness in the real economy, itself partly a product of lower credit supply and asset prices. The eventual depth and extent of financial disruption is still uncertain, however, with potential further losses on housing and construction finance being one source of concern. The downturn in housing markets is still unfolding, with reduced credit supply likely adding to pressures."

New housing legislation is set to help as many as 500,000 homeowners avoid foreclosure by helping them refinance into more affordable government-backed mortgages. However, many more struggling borrowers will not qualify for the programs. Luckily, there are some alternatives for these homeowners in the form of "short sales" and "deed in lieu of foreclosure" transactions. The Wall Street Journal outlined these two strategies in their article "Two Alternatives to Foreclosure" in today's paper.

These options won't keep you from losing your house or damaging your credit score, but they will both ease and slow the process to give you time. Short selling involves the borrower selling the house at a fair market value that is less than the amount owed on the mortgage and then having the lender forgive the remainder of the debt. The other option involves handing over the property to the lender in lieu of waiting for foreclosure with the lender assuming the remainder of the debt.

Both of these options allow homeowners to escape with little to no debt, but no money or house to speak of. In contrast, foreclosures can result in lenders pursuing the differential owed to them. The two also allow borrowers to face a shorter waiting period before they can obtain another mortgage. These two options can help homeowners get back on their feet quicker than they would be able to through a foreclosure.

Employees are expecting another pay raise this year on par with last, but the increase may be offset by rising inflation rates and lower bonuses tied to company performance. Raises are expected to come in at around 4.4% among high performers and 2% or less for more mediocre workers. However, inflation is rising at a hefty 5% rate, which means rising costs will eat up most of that extra income. Even high performing workers will likely still end up losing.

The exception to this pay rule appears to be workers that fill difficult-to-replace positions or those working in growing industries. Heathcare, government and education jobs are among those that can count on decent pay raises to offset rising inflation. Other industrials that aren't willing to issue raises may face troubles with retaining key talent, according to employment experts. Companies that get too far behind inflation risk upsetting their employees.

In the end, the American economy functions such that employees are rewarded for performance. With a bad economy overhanging, it is difficult to reach and surpass performance goals. However, Americans also do not like moving backwards in pay. This conflict may end up shaking up the American workforce over the next few months as the economy slowly begins to recover.