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Holiday spenders may need short term lending

Feb 04, 2014 Quinn Thomas

The holiday season is behind consumers, which means many now have to deal with the consequences of potentially having overextended themselves to purchase gifts for their friends and family.

Total holiday retail sales increased 3.8 percent to $601.8 billion, which was inline with expectations, according to the National Retail Federation (NRF). Non-store transactions totaled $95.7 billion - a 9.3 percent year-over-year jump.

"Despite facing a truncated holiday season, severe weather and shaky consumer confidence, retailers rose to the challenge and executed their strategies with proven success," NRF President and CEO Matthew Shay said. "Today's holiday sales numbers are a testament to a resilient industry that knows what their customers want, when they want it and how they want to get it."

Overall, December retail sales increased 0.2 percent on a seasonally adjusted month-to-month basis, and 4.1 percent adjusted year-over-year. With so much happening in 2013 that could have negatively impacted consumer spending during the holidays, such as the government shutdown, it is good to see that expenditures increased.

Consumers who did spend too much during the holidays may now be struggling to meet the monthly essentials, which could present a major problem moving forward.

Short term lending could prove beneficial
Anyone who is struggling following the holidays might want to consider a short term loan. This type of financing can help people get money fast so they don't incur any late fees or penalties on missed bills.

One of the best situations that short term lending could come in handy is when consumers face an unexpected expense. For example, if a person's car breaks down following the holidays, they could struggle to come up with the funds needed for repairs while staying current on monthly bills, such as their credit card and mortgage.

The problem with short term lending is that it gets some negative press, which could push people away. However, consumers should weigh the pros and cons of this type of lending. Critics claim the fees and interest rates charged make this a costly venture, however, the total charged to secure a loan is often less than what people may incur if a payment is late or missed.

Everyone's situation will be different, but short term lenders may want to advertise to holiday shoppers who could have overextended themselves.