Improving consumer confidence could increase spending

The holiday season generally brings millions of consumers to malls and shopping centers across the country, which generates a high level of spending in the final two months of the year.

The following months often see a slowdown in spending, as families begin to pay down holiday debt. But, that might not be the case this year as consumer confidence rebounded mightily in December, potentially helping to keep expenditures elevated.

The Conference Board Consumer Confidence Index increased to 78.1 in December following a decline to 72 in November. The indexes measuring the present situation and future expectations both posted gains as well.

"Consumer confidence rebounded in December and is now close to pre-government shutdown levels (September 2013, 80.2)," said Lynn Franco, director of economic indicators at The Conference Board. "Sentiment regarding current conditions increased to a 5 and a half year high (April 2008, 81.9), with consumers attributing the improvement to more favorable economic and labor market conditions."

Struggling consumers can turn to short term lending
Elevated consumer spending levels and high confidence are both positives, but unexpected expenses could create financial troubles for people in the future. For example, if someone recently made a major purchase and ends up in the emergency room, it may be difficult to cover the hospital bill and stay current on monthly essentials. This is why the months following the holidays are a critical time of year for short term lending.

This type of financing can help keep people out of trouble. As soon as an unexpected expense hits, a short term loan can be applied for. If approved, funds are released quickly to ensure that borrowers stay current on bills in trying financial times. The problem facing these lenders is that there is a fair amount of negative press. Critics claims that short term loans come with high fees and interest rates, but it is important for borrowers to consider the whole picture.

If bills are missed or paid late, people will likely be charged late fees and penalties. When considering a short term loan, it is important to weigh the costs versus the fees that could be charged. Lenders need to emphasize this point to ensure that consumers aren't turned off of short term loans based on the opinions of critics.