This financial meltdown, while slightly esoteric, will soon hit main street. The lack of money floating around in the world will squeeze the regular folk who use credit cards. Plus, with newspapers sending out hysterical headline after hysterical headline, people are feeling a little uneasy.
NYT: The latest outgrowth of the housing crisis, the breakdown on Wall Street, threatens to gradually corrode economic activity on Main Street, mainly by disabling the credit on which so many everyday transactions depend — but also by frightening people.
Lenders of all types had already been raising the bar for borrowers, turning away all but the best customers. This week, they became even less willing to part with their money, further crimping budgets and family spending.
An economy propelled by easy credit for more than a decade is fraying as credit disappears. American Express, to take one striking example, is reducing the maximum credit limit for half of its tens of millions of cardholders.
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