WASHINGTON — Focused on keeping the recovery going and driving down double-digit unemployment, the Federal Reserve is poised to leave interest rates at a record low.Fed Chairman Ben Bernanke and his colleagues, at the end of their two-day meeting Wednesday afternoon, will likely strike an upbeat note about the progress the economy is making. But they’ll also caution that now is not the time to be complacent against risks.

Signs are growing that the economy is on the mend. Consumers and businesses are spending again. The housing market is stabilizing. Manufacturing is growing. And layoffs are moderating.

But there’s much uncertainty about how the recovery will fare next year after government stimulus starts to fade. Loans are also still difficult for many people and businesses to get, a force putting a damper on an energetic economic rebound.

Against that backdrop, the Fed is all but certain to keep the target range for its bank lending rate at zero to 0.25%, where it’s stood since last December.

The Fed also is likely to retain a pledge first made in March to hold rates at such levels for “an extended period.”

In response, commercial banks’ prime lending rate, used to peg rates on home equity loans, certain credit cards and other consumer loans, will remain about 3.25%. That’s its lowest point in decades.

Super-low interest rates are good for borrowers who can get a loan and are willing to take on more debt. But those same low rates hurt savers. They’re especially hard on people living on fixed incomes who are earning measly returns on savings accounts and certificates of deposit.

Tight credit is clobbering small businesses, normally an engine of job creation during economic recoveries. That’s crimping their ability to hire and expand.

Many small businesses rely on smaller banks for credit. But troubled commercial real estate loans are concentrated at those banks. That’s hobbled the flow of credit. At a White House meeting Monday, President Barack Obama urged top bankers to increase lending to small businesses. Afterward, some banks pledged to do so.

The central bank also isn’t expected to make any major changes to a program, set to expire in March, to help further drive down mortgage rates.

A big question is whether the Fed will hint about when they will reverse course and start boosting rates.

Plans for reeling in the unprecedented amount of money the Fed has plowed into the economy to bolster the recovery are likely to figure prominently during the closed-door discussions.

The central bank faces a high-stakes challenge: If it removes the stimulus too soon, it could short-circuit the fragile recovery. But if it moves too late, it could unleash inflation or new speculative asset bubbles.

Bernanke, who’s seeking a second term as Fed chief, has made clear his No. 1 task is sustaining the recovery. Last week, he and other Fed officials signaled they are in no rush to start raising rates.

At the same time, Bernanke has sought to assure skeptical lawmakers and investors that when the time is right, he’s prepared to sop up all the money. Some worry that the Fed’s cheap-money policies will stoke inflation.

A government report out Tuesday showed that wholesale prices shot up last month, but most economists think it will prove fleeting.

Federal Reserve Chairman Ben Bernanke repeated his belief that slack in the economy — meaning plants operating below capacity and the weak employment market — will keep inflation under wraps.

“The bulk of evidence indicates that resource slack is now substantial,” Bernanke wrote, in a letter released Tuesday. The Fed chief was responding to wide-ranging questions posed earlier this month by Sen. Jim Bunning, a Kentucky Republican.

Some encouraging signs for the economy have emerged lately. The economy finally returned to growth in the third quarter, after four straight losing quarters. And all signs suggest it picked up speed in the current final quarter of this year.

The U.S. unemployment rate dipped to 10% in November, from 10.2% in October. And layoffs have slowed. Employers cut just 11,000 jobs last month, the best showing since the recession started two years ago.

Still, the Fed predicts unemployment will remain high because companies won’t ramp up hiring until they feel confident the recovery will last.

Consumers did show a greater appetite to spend in October and November. But high unemployment and hard-to-get credit are likely to restrain shoppers during the rest of the holiday season and into next year.

Thus, keeping rates low “is still central to the Fed’s economic game plan,” said Greg McBride, analyst at Bankrate.com. “Even a better than expected November employment report may prove to be a one-hit wonder and won’t be enough to shift the Federal Reserve away from a cautious economic tone.”

The average heating residential customer will pay about $2.92 more per month for
the next three months.  New rate 23 percent lower than this time last year.

(Philadelphia, PA – Dec. 1, 2009) – The Philadelphia Gas Works (PGW) announced that it will increase the price its residential customers pay for natural gas.  The average heating residential customer will pay about $2.92 more per month for the next three months, and with the increase, the new rate is still about 23 percent lower than this time last year.  The cost PGW pays for natural gas is passed on to the customer without markup.

Residential heating customers will pay $1.55 per one hundred cubic feet (Ccf) of natural gas beginning December 1, 2009.  The new cost for gas will change from $1.53 per Ccf to $1.55 per Ccf.  The price for PGW’s commercial, industrial and municipal customers will also increase on December 1, 2009.

“After five consecutive decreases, PGW is increasing what customers will pay for the natural gas they will use by two cents per Ccf,” said Thomas E. Knudsen, President and Chief Executive Officer of PGW.  “We understand that no one likes to pay more, but thanks to our storage and contracting practices we are able to minimize the increase and purchase the most economically priced natural gas we can for our customers.”

The company anticipates that its rates will remain stable through the winter, based on current market conditions, producing savings for all of the company’s customers.  PGW’s residential natural gas rates are made up of two main components: a supply charge and delivery charge:

The supply charge is the part of the bill that reflects the amount of gas used

The delivery charge includes the cost of delivering natural gas to the customer’s meter, distribution system maintenance and customer billing, as well as weather adjustments

The rate will stay in effect until PGW announces the next adjustment, which will go into effect on March 1, 2010.

This year PGW is directly applying LIHEAP Cash grants to Customer Responsibility Program (CRP) customers.  So, in addition to the regular CRP discount, LIHEAP Cash will further reduce the amount CRP customers need to pay.

LIHEAP’s new eligibility requirements are:

Household Size  Maximum Yearly Household Income
1       $16,245
2       $21,855
3       $27,465
4       $33,075
5       $38,685
6       $44,295

Application Periods Have Changed

The period for LIHEAP Cash and Crisis applications will end on March 15.  The application period for LIHEAP Crisis won’t start until January 4, 2010.  However, households without heat may qualify for an exception that will allow them to apply for both Cash and Crisis before January 4.  Customers should apply now to find out it they are eligible.

The program’s grant sizes and schedule has changed:

New Grant Size Program Open Program Close
LIHEAP Cash     Minimum: $100 Maximum: $1,000   November 2      March 15
LIHEAP Crisis   Minimum: $25 Maximum: $400      January 4       March 15

Customers can apply for a LIHEAP Crisis grant at The Philadelphia County Assistance Office’s (PCAO) Sedgley District Office at 1348 W. Sedgley Ave.  After January 4, PCAO will open two additional locations once a week for Crisis applications.

Customers can apply for LIHEAP Cash at any of PGW’s Customer Service Centers.  They need to bring social security numbers and proof of yearly income for everyone living in the home.  More information about the Customer Service Centers and the LIHEAP program is available at www.pgworks.com/LIHEAP and PGW’s LIHEAP hotline, which is 215-684-6100.

NEW YORK — For Citibank credit card holders, there is one way to escape the bank’s rate hikes currently under way: Meet a monthly spending requirement.

Those who meet the spending minimum – in some cases $750 a month – will be able to get a rebate on their total interest charges for that month. The rebate could cover some or all of the interest rate hike. Customers also need to make payments on time to qualify for the rebate.

Without giving specifics, Citi said the monthly spending requirements and interest rate hikes will vary depending on the cardholder’s credit history.

About half of its customers will be able to erase 50 percent to 100 percent of their rate increases through the rebates. Citi said its rebates will be based on interest charges for an entire balance, not just monthly charges.

With 92 million credit cards in circulation last year, Citi was the second largest card issuer in the country, according to CreditCards.com. Chase was the largest with 119.4 million cards, and Bank of America was third with 80.2 million cards.

The change by Citi comes as the industry rushes to adjust to sweeping reforms to start in February that will limit when and how much card issuers can hike interest rates. In a statement, Citi said the actions were necessary given elevated losses from souring loans and “regulatory changes that eliminate repricing for that risk.”

The bank also noted that “customers who do more business with us will have the most opportunity to reduce their rates.” Of course, consumers could need to spend more than they otherwise would to qualify.

That’s the case for Lindsey Pappas, a 25-year-old public relations professional in San Francisco. She received a letter from Citi Wednesday that her interest rate was being hiked to 19.99 percent, up from 14.99 percent.

http://www.huffingtonpost.com/2009/11/20/citigroup-credit-cardhold_n_364999.html

http://www.usatoday.com/money/perfi/credit/2009-06-29-banks-fees-credit_N.htm?csp=34