Oil Prices Boost Consumer Spending; Bad Credit Loan Applications Increase

Consumer spending grew despite the fact that wages remain more or less the same. This is because of the rising gas prices that have forced consumers to spend instead of save. According to the Commerce Department, consumer spending grew by up to 0.5 percent in August. This is, by far, the biggest leap of consumer spending since February of this year.

Last August, the price of gas has increased by almost 50 cents per gallon. Although the cost of food remains to be quite stable, this dramatic increase has also severely affected the saving rate of American families. In fact, with income growing only at 0.1 percent, employees are left with no other choice but to turn to banks and other institutions that provide bad credit loans.

Bad Credit Loans Are Better Guided

Luckily, the unending demand for bad credit loans has pushed for the state to act on them fast. Regulations are now in place, with states either legalizing or not legalizing these forms of fast loans. Meanwhile, other states have established regulations dictating what can and cannot be done by lenders.

A list of state-licensed lenders is readily available at states that have legalized short-term bad credit loans. The Better Business Bureau also has a list that is posted in their website. These should serve as guidelines for borrowers in determining which lenders are genuine.

Another requirement issued to all nontraditional lenders would be the 100% transparency rule. This means that lenders should inform all potential borrowers of the full cost of the bad credit loans prior to reaching an agreement. This pertains to all fees, interests and charges as well as the complete term of the loan. The FAQ page should provide basic information while in-depth discussions should be given by the lender’s customer service representative.

Lastly, both the traditional (banks) and nontraditional (online) lenders should provide free financial counseling to borrowers who have shown difficulty in fulfilling their obligations. Some firms would even extend the help that they are willing to give to the freezing of interest rates.

Although more economists remain to be positive of the future of economy, there are still a lot of factors to consider. Job hiring still needs to pick up, investors’ confidence need to be regained, gas and utility costs need to be driven down and wages need to go home. But it feels better to know that in all these, employees would still have the banks and other nontraditional firms to turn to for bad credit loans.