By now we all know that the economy is to the brink of failure.  What we may not know is the far reaching effects that this collapse is causing for us, the average consumer.  Credit card companies are tightening their belts making it more difficult to offer credit.  Other consequences of new credit card policies are staggering interest rate increases and lowered credit limits.  Many of us don’t even know about these changes until we look at our statement.

You may think that if you pay your bills on time consistently that you are safe from these changes.  However, the economy is hitting everyone, even those who are responsible and pay their debts on time. 

One of the reasons for this tightening is that banks are also finding it hard to get credit which in turn decreases the amount of money they have to loan.  With the economy flailing, risk for credit card companies increases which means they need to charge us more to keep their profits stable.

All these years of easy credit are now coming to haunt the entire country from wealthy corporations to the consumer on Main street.  The consequences are far reaching and include lower credit scores because if your credit limit is reduced you debt income ratio increases, which makes it even harder to buy a new home or car.  To obtain student loans and to curtail family vacations.  All these things perpetuate the downward spiral.  Consumer spending will be down, new home sales will continue to drop, and auto companies will sell fewer cars.

What will we do as a society if we can’t have our precious credit cards?  Maybe it will make us a more responsible generation.

The question on many people’s minds is how do we turn around this dangerous trend.  Will the government bailout reverse the drop?  Nobody really knows yet, even so called financial experts have conflicting opinions about whether the bailout is the answer.

The news however is not all doom and gloom.  In the financial history of the United States we always bounce back.  The markets have consistently corrected and prospered given enough time.  As the economy recovers credit will again be able to live our lives on credit.  The credit card companies will prosper despite the quagmire that they are largely responsible for creating.

The markets will recover and we will again achieve the prosperity that we have come to expect but how will this expect our parents and grandparents. 

While this is comforting news for young and middle aged Americans the news is much more dire for those about to retire.  These people who have spent their entire working lives saving for retirement are now finding it impossible to maintain their lifestyles or to even retire at all.  The market may not recover in time to ever get back their precious nest eggs.

The elderly who have worked to achieve a better life for their children and grandchildren are now footing the bill for our financial irresponsibility.  We should be ashamed of the plight we have created for our elderly.