What does means to you -mortgage, credit cards rates and economic scenario?

FinanceTags: Credit Cards, Credit Cards Rates, Economic, Finance, Mortgage

What does means to you -mortgage, credit cards rates and economic scenario?

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As a consumer, you may be surprised that economists are telling us that the worst of the recession is over because you are not feeling it and if you haven’t noticed the effect in your pocket or bank balance the chances are that the recovery isn’t happening as fast as the predictions.

The credit card interest rates on cards carrying debt have gone up and may continue to rise.  The mortgage interest rates could rise to as much as 8% during 2011 so if you have a fixed rate you will benefit. Oil and gas prices are likely to reach record highs in 2011.

Consumers like you drive the economy forward and it is this process which influences your standard of living, your career prospects, you income and your enjoyment of life.

As the economy comprises largely the individual wealth of Americans it has to thrive for consumers to achieve and as the economy grows most people benefit.

A measure often used to ascertain how the economy is progressing is GDP quarterly figures produced by the Bureau of Economic Analysis which define how many good and services are produced in the USA.  However, these figures do not necessarily tell us everything we need to know.

We assume that if there is growth in GDP then the economy must be fine.  What it can mean is that although we are not seeing sales figures drop there are a lot of people who have lost their jobs recently and therefore cannot benefit from the growth.

In a time of recession most businesses will have run down stocks rather than replenish them so it seems likely that the GDP figures will be a lot different during 2011. Unless you have a high income, as a consumer you cannot do much to improve the economy because you will be consuming less and you can only increase your spending if you pay lower taxes or generate more income.

When the price of goods increases, we refer to this as inflation. The consumer price index shows us the cost of normally purchased items.  When the Federal Reserve prints more money it devalues the dollar and inflation ensues so when your dollar is worth less, naturally you consume less which demonstrates how economic growth or lack of it affects you.

As an individual, though times are hard, saving will assist the economy in the long term.  If everyone put a little aside from their salaries initially the economy would dip but when people have more money in their savings accounts, they will have more confidence to spend some of it and this should achieve an upturn in the economy.

As an individual there is not much you can do as far as how the recession affects you and we have to rely on our politicians to manage the finances of our country.  Since we are experiencing the worst recession since 1930 most of our politicians have not experienced this before and so it is a learning curve for them.  We have to hope that they will learn soon how best to effect a recovery.