Along with banks that are now undergoing increased scrutiny, credit-happy consumers are also finding themselves pushed against the wall as they begin to realize that they need to deal with life without credit. The US economic crisis has forced the credit card industry to rethink its strategy. Since the “revolving credit” concept was introduced in 1958 in the US, the business expanded to become a $1-trillion industry. Between 2005 and 2008, consumer spending using credit has bought the savings rate in the US to nearly zero.

But in May, this trend reversed. The savings rate rose to 6.9 percent, a 15-year high that was boosted in part, by the federal stimulus package. This is just one of the signs that the credit card industry is about to reverse. For the first time in its 40 year history, it is expected that revolving credit will decline.

Credit card companies are tightening credit standards because the default rate has doubled from 2006. Likewise, consumers are hesitant to take on additional debts when their economic future remains uncertain. In many places around the country, the value of real estate properties are still precautious and job security is becoming an increasing concern.

Changing the Consumer’s Spending Behavior

For many, their attitude towards debt has changed. During the housing boom, it seems practical for homeowners to borrow money using their home equity. The new marketplace dynamics changed all that. Even after the US comes out of the recession, spending habits will already be influenced by this dramatic experience.

Over the short term, the consumer’s motivation to save may effectively halt fast recovery because around 70 percent of the US economy relies on consumer spending. Over the long term though, a high savings rate will provide individuals with sufficient capital to invest in new ideas and innovations. It is predicted that this will create jobs and spur economic growth.

In the meantime, there is no escaping the fact that both the credit card companies and the consumers are struggling for balance. Banks are trying to figure out how to establish the credit worthiness of their clients because the FICO score seems less effective in today’s turbulent environment. On the other hand, consumers are adjusting to a “leaner” lifestyle where they need to cut back on almost everything to survive.

With today’s economic crisis, it is important for everyone to cut cost where they can, whether in business or in their personal life. Saving money for yourself and for your family is actually simpler than you think. For this week’s roundup, we compiled a list of blogs that might help you save money on everyday expenses.

Jaimie Paynter @ Bargaineering introduced the idea of using allowance as a budgeting tool in the post “Do You Need An Adult Allowance?” Essentially, it takes the idea of “budgeting” one step further because everyone is familiar with the idea of allowance since childhood. Someone in authority controlled our spending. As an adult though, using allowance don’t need to be controlling. Rather, it can actually free from your financial burden when used property.

David @ My Two Dollars wrote a post titled “If You Don’t Need It, It’s Not a Bargain At All“. From this headline alone, readers will have a pretty good idea about what this post is about. It talks about how customers are usually encouraged to spend simply because “deals” are being offered in the market especially during hyped-up occasions.

J.D. @ Get Rich Slowly recently uploaded a blog post “How I Cut My Television Bill in Half“. Here, he provides some alternatives to cable television. Deluxe cable packages can cost a significant amount. But if customers know about other options that deliver the same kind of service, they can reduce their bills dramatically. J.D. gives viewers some choices such as buying shows from iTunes store and watching shows for free in Hulu.

Trent @ The Simple Dollar wrote an interesting post “Buying Fresh, Buying Cheap“. The blog post outlines the different ways a consumer can save money from buying fresh fruits and fresh meat. Usually, most people instantly assume that fresh is more expensive compared to canned goods. Trent reveals tht this isn’t necessarily the case when you know how to look for bargains.

The My Dollar Plan Blog consulted with newly-retired IRS officials about tax deductions from gas mileage in the post “Tax Savings: How to Deduct Tax Mileage on Your Personal Car“. With the kind of economy today, it is important to cut costs where you can, tax mileage included. This blog post shows how a car-owner can save money from using his car for business purposes.

To build on the Friday Financial Fitness from two weeks ago, we have included 5 more every day tips to save money.  Taking simple steps to save money has a chain reaction that improves the quality of your life in more ways than one.  First, additional money in your pocket will help you pay off those bills faster, thus decreasing stress and anxiety that often accompanies debt.   By decreasing your debt at a faster rate, you will also be well on your way to improving your credit score; improving your credit score impacts your borrowing opportunities.  Below, we outline 5 more ways to save money on a daily basis.

5 More Everyday Tips to Save Money

1. Cook at home; then bring your leftovers to work for lunch

Every day, millions of Americans spend a minimum of $5.00 a day when going out to lunch during the work day.  If you live in a more expensive city, the price of a single lunch can skyrocket to $10 or more per day.  When you’re working 5 days per week, that adds up to $50 per week, $200 per month, and $2400 per year.  That $2400 could be used to pay off outstanding debt, or put away for a rainy day!  Though the work week is often busy, try to set aside some time (maybe even on a Sunday) to cook for the week.  Buying groceries is much cheaper than buying your lunch every day; cooking in bulk for the week will help you pocket that much more money over time.

2. Make personal calls on your cell phone during evenings and weekends

Many of us find that every month, our cell phone bills seem to skyrocket.  One call here, another call there-and suddenly you have exceeded the total number of minutes included in your plan.  If you have a plan that offers free phone calls in the evenings and on the weekends, try and schedule your personal calls during these times. Month to month, this will reduce your bills, helping you pocket a substantial amount of cash over the course of a year.

3. Avoid ATM Fees

When you’re in a hurry and you need cash, it’s convenient to withdraw money at the closest ATM you can find.  If you are withdrawing money from another bank’s ATM, the average fee each time you do is around $1.97.  Fees can even go up to $4.00, depending on where you are.  Banks make a fortune charging non-customer surcharges and consumers spend a fortune filling banks pockets.  Next time you’re in a hurry to get cash, take a few extra minutes to figure out if your bank has an ATM nearby that you may not know about.  If you really want to stop spending on non-customer surcharges, plan to get cash before you go-those few extra minutes of planning will save you money over time!

4. Track every dollar you spend for 2 weeks

This simple, 14 day exercise will bring more awareness to your personal spending habits.  Get a small notebook that you can carry around with you; for 2 weeks, simply record every dollar you spend and what you buy.  After the 2 weeks are up, it will be interesting to see where all your money has gone.  Take a close look at every purchase and then figure out ways to cut corners.  You may be surprised to find that you may not need that $5.00 magazine after all.

5. Leave your credit card at home

During this financial crisis, it is crucial to not only limit the amount of cash you are spending, but also to limit the number of times you swipe your credit card.  Though there has been a recent push to regulate credit card companies and the fees and interest rates they charge, racking up credit is a dangerous habit that all too many Americans have developed.  Simply stated, if you cannot afford, don’t buy it!  Help yourself resist the temptation to swipe that credit card by leaving it at home.  If you don’t have it with you, you can’t use it

In response to the financial crisis, Americans need to be well-aware that changing our frivolous spending habits is crucial; however, this week, Congress is holding credit card companies responsible for their practices as well.   Consumers are subject to credit card companies’ terms and conditions upon signing their detailed agreements; however, what happens to consumer rights when these credit card companies change terms at their own discretion?  The results have proved disastrous for everyday Americans’ bank accounts, as abusive credit card practices find new ways to create endless amounts of monthly fees.

Credit Card Companies’ Abusive Practices

To understand both the importance and potential impact of laws that protect consumers against credit card companies, it is crucial to be aware that credit card rates change unexpectedly.  Fees often appear on your monthly statement out of nowhere, even when you pay your bills on time and have made serious efforts to be in good credit standing.  These companies raise interest rates and dramatically cut credit limits, with little or no regard for how these changes affect loyal customers.  Struggling consumers are left with a large bill and little support-until now.

Senate Banking Committee Approves Bill to Regulate Credit Card Companies

Good news: the Senate Banking Committee, led by Chairman Senator Chris Dodd of Connecticut,  approved legislation that will begin the fight against unfair credit card company practices.  Below is what was outlined in the bill:

• “Protect consumers from “any time, any reason” interest rate increases and account changes.”

• “Prohibit unfair application of card.”

• “Protect cardholders who pay on time.”

• “Limit abusive fees and penalties.”

• “Prohibit issuers from using a consumer’s card history with another creditor to raise interest rates.”

• “Prohibit issuers from charging interest on debt that has already been repaid.”

• “Ensure that cardholders are informed of the terms of their account.”

• “Protect young consumers from aggressive credit card solicitations.”

What will the Credit Card Accountability, Responsibility, and Disclosure Act do for Everyday Americans?

This bill will give a voice to consumers that goes beyond the 24/7 customer support that most credit card companies offer.  The consumer’s voice will now have legal backing, as the government is taking the first step to acknowledge the role credit companies have played in the US financial crisis.  According to The Consumer Federation of America’s Legislative Director Travis Plunkett, “Congress is taking a strong stand against the traps and tricks that many credit card companies use to increase their profits at the expense of financially vulnerable consumers.” With a July 1, 2010 deadline to implement the bill’s outlined changes, Americans can begin to feel good about the progress we are making towards fixing the credit crisis.  The crisis certainly cannot be fixed overnight, but bills like this make accountability a priority for both businesses and consumers.  With legal backing, credit card companies will be forced to take an active role in getting our economy back on track.