Who's getting slammed by credit mess?

The consumer

No one should be shocked that spendthrifts with wallets full of maxed-out credit cards are having a tougher time getting loans. But even responsible consumers, who follow such formerly passé advice as paying their bills on time and buying only houses they can afford, are confronted with higher interest rates and less access to credit.

Bank of America has raised credit standards and is more likely to refer some applicants -- especially those in California, Florida and other areas experiencing the most economic stress -- for review by credit specialists.

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At the same time, the average interest rates on credit cards have remained virtually unchanged at around 12%, according to LowCards.com.

About two-thirds of banks recently told the Federal Reserve that they had tightened lending standards for consumer loans.

Matthew Towson, a spokesman at Discover Financial Services, says the credit card company has reduced its marketing in high-risk areas and may offer consumers in those regions lower credit limits.

Many student-loan providers had previously cut back. Several companies, including student-loan provider My Rich Uncle, have stopped offering private loans altogether.

Amanda Tossberg, a public-relations consultant in Nashville, Tenn., was shocked when she and her husband went to buy a new car in late June and were offered an interest rate of close to 10% on a $13,000 loan.

"I said, 'What's the point of spending all these years working to build good credit if you're not going to get rewarded for it?'" recalls Tossberg, who says her husband's credit score is in the 800s. She told the dealer that such a high interest rate was a deal breaker. After some back and forth, the dealer offered the couple a rate of 4.9% over 60 months.

Indeed, it's the people with sketchier credit backgrounds who are getting squeezed the hardest. Jesse Toprak of online car site Edmunds.com says some customers with poor credit histories are paying 20% for auto loans. And lenders have started requiring larger down payments. The average for new vehicles climbed to $3,000 in September, up from $2,200 earlier this year.

Continued: New stresses on investors

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