The enactment of the new credit card regulations has people griping about changes in their interest rates. Another way to look at this would be to treat a credit card as cash. Paying the minimum perpetuates debt. Using a credit card in the absence of cash (or the ability to use cash) does not mean the debt does not have to be repaid. This leads otherwise money savvy people to spend what they don’t have in order to make sure they have the necessities.

For those with no balance on their credit cards or a small balance, check out this calculator from the FTC to see how long it will take you to pay off your credit card debt. If you have little or no debt at all and enter in your credit card rate with a fictional amount: pretend you went on a spending spree. The amount of time that it would take to pay off the bill would be enough to keep you on the straight and narrow. Pass it along to friends who need assistance in their finances. It might shock them enough to see how much they pay in interest by paying the minimum.

Consumer confidence is on a roller coaster. One month it is up another it is down. Since the information is based on a small survey of 5000 people this only gives a small amount of people who are confident that the economy is improving.

Consumer confidence “appears to be back on the mend,” said Lynn Franco, head of the consumer research center at the Conference Board, which is a private research group.

If the majority of the people who were surveyed were in an economically depressed area, I think the responses and numbers might be higher. Though the increased consumer confidence is a positive economic boost since 2/3 of our economy is based on consumer spending, the more people spend, the better the economy will fare. Also announced today people have been paying their credit cards off, but not their mortgages. More mortgages have been entering the 90-day delinquency stage but credit card debt is decreasing.

This is also how the economy became troubled initially, too much consumer spending that people couldn’t afford.

Confidence also depends on employment status as well. For those who are employed and able to pay all of their bills there is more likelihood that they will see the economy improving. The un- and underemployed might have a different take on the economy if they cannot afford to buy what they really need (or even affordable nonessentials).

This month the consumer confidence is up and it may keep rising. Consumer confidence is personal. Those who can afford what they need and some of their wants are those who are most confident.

Financial experts are making changes in their advice about saving, spending and dealing with debt.

Suze Orman is urging people to pay the minimum on their credit cards and save some cash.  This is an about face to the advice she was giving before. Now Suze is telling people as part of her recession information to just pay the minimum.

Say what? Contrary to every bit of advice that anyone has about credit cards, Ms. Orman is recommending to people who are in financial straits to pay just the minimum payment, and do not use their credit cards any longer. This way there is still a line of credit if necessary and the money that is in savings can be used to pay bills, if the person is unemployed or underemployed.

Paying only the minimum does not get you out of debt any faster but does allow you to keep your head above water.

Making only the minimum payment seems silly and keeps you in debt, but if you are using the money to pay off other necessities, prioritizing your debt, then there is a chance to keep your credit card accounts. Paying them off, might mean that your credit limits will be reduced.

Suze is the only financial advisor who is giving this advice openly. Many will say pay what is necessary such as mortgage or rent and utilities, etc. Paying the minimum amount keeps people in debt and the credit card companies in business.

Is Suze giving the right advice to only pay the minimum?

Cash is coming back in style. This isn’t popular with some retailers just as Christmas is around the corner. Since more people are afraid of incurring more credit card debt people are looking to pay for things in cash. That is great but if you have a credit card and choose to use it wisely that isn’t a problem. 

Using cash isn’t the only thing that is troubling for retailers since the holidays are coming up… people are planning to spend less than they did last year on gifts.

Both of these things can be really great for us as consumers because this will mean that retailers will be pulling out more stops than they did last year to encourage people to buy. This means that more free shipping deals will abound (if you haven’t seen any already) and discount coupons will be available in stores.

As I’ve said before using a credit card isn’t bad, if you can pay off the balance.

Before spending, make a budget for holiday spending or if you have a large family try to see if you can set a spending limit or participate in a gift exchange with one family member. For those with children, nieces, nephews, etc. you may have more difficulty buying just one gift but you could also find out what is one item that the child really wants.

Holiday shopping shouldn’t be comprised of impulse buys. Christmas and Hanukkah come every year. This should not be a surprise that people have to scramble to buy gifts or to make preparations. If you have to go into debt to buy gifts, then you shouldn’t. If you have the makings of a gift at home then do that but spending because you want to give a gift you can’t really afford, makes no sense. 

Start putting those dollar bills aside now to help ease the burden of gift shopping. Even if you are making tins of cookies for people, or other homemade goodies, you need to make sure that you have enough materials. Better late than never to start preparing for Christmas.