Consumers expected to spend more this holiday season

When the holiday season nears, consumers generally spend more money to provide their families with gifts. As a result, short term lending activity could pick up in the following months, as Americans expose themselves to financial troubles.

With the economy improving at a gradual pace, retailers are expected to see heightened sales levels this year, according to Deloitte. In fact, holiday sales are projected to rise to between $963 billion and $967 billion, which would represent a 4 to 4.5 percent jump.

"Rising home prices with steady job creation may buoy consumers' confidence in the economy and create a wealth effect," said Daniel Bachman, Deloitte's senior U.S. economist. "The debt ceiling and budget debate will resume this fall alongside uncertainty about the implementation of health care reform, which may cause some concern among consumers, but at a macro level, these factors are unlikely to have a significant effect on the economy and retail sales."

Strong home value appreciation aiding consumers
Part of the reason Americans will be able to spend more money this holiday season is the fact that home values have been increasing in recent months - providing a boost to household wealth.

August proved to be another strong month, with a 0.4 percent bump from July and 6.6 percent year-over-year increase - the largest since July 2006, according to the latest Zillow Real Estate Market Reports.

Appreciation isn't expected to slow much over the next year, with a 5.2 percent growth rate projected for the 12-month period ending August 2014.

"August marked the end of one of the hottest summer home shopping seasons in years, as home value appreciation rates continued their rocket ride upward – perhaps dangerously so in some metro areas," said Zillow Chief Economist Stan Humphries.

Short term lending demand could rise to begin 2014
After increasing spending between October and December, Americans may find that their bank accounts are depleted at the start of the new year. Therefore, short term lenders should prepare for an influx of applications.

Should any consumer experience an unexpected expense following the holidays, they could be in for a financial disaster. However, a short term loan could provide some relief. The ability to secure funds quickly can help prevent any late fees or penalties that may be charged for missing a payment due to a surprise cost.