Now that they have your money, they want more.

Millions of cardholders have recently
received letters from the likes of
Citibank, Bank of America Corp., Wells
Fargo & Co. and American Express Co.
notifying them that their interest rates
are going up, in some cases to 30% if a
single payment is missed.

JPMorgan Chase & Co., the nation's largest
issuer of plastic, has begun charging
hundreds of thousands of cardholders a $10
monthly fee for having carried large
balances for more than a couple years.

Why? In part it's because default rates
are rising and banks are dealing with
additional risk. But lawmakers and
consumer advocates say the higher rates
also reflect banks' massive losses from
betting wrong on the housing boom, and
they're basically sticking credit card
customers with the tab.

Which is about what you would expect from these
weasels.

What's in your wallet ?

C

I especially like the conclusion to this article.

Still, the approach remains paradoxical. Our
profligacy has gotten us into trouble, and so
the response is ... more profligacy? There is
no shortage of critics who contend that
today's massive government spending is simply
laying the foundation of another financial
crisis, this one centering on a loss of
confidence in Treasuries and the dollar.

For now, we're betting that it won't--and
investors from around the world are letting
us get away with it by continuing to buy
U.S.-government debt. We will, however,
eventually have to shape up. Consumers must
pay down their credit cards, and the country
must pay down at least part of its debt.
"Some of the painful adjustments that are
taking place are not avoidable," says David
Blankenhorn, founder and president of the
Institute for American Values, a New York
City think tank that for the past few years
has made an obsession of thrift. "Wringing
debt out of our economy at every level is a
painful and inevitable process, and it isn't
going to be solved by charging more things at
the supermarket."

Blankenhorn isn't opposed to using government
stimulus to ease the transition, but he's
worried that it could obscure the need for
big changes in behavior. "If the moral of
today's crisis is 'Let's stimulate this and
bail out that, and as soon as things get back
to normal, we can go back to a debt culture,'
that's just not a sustainable idea," he says.

Boy..he's got that right. {Emphasis mine}

He's right. Virtually all economists agree
that there is no paradox of thrift in the
long run. Saving stimulates investment.
Careful stewardship of resources brings
prosperity. Frugality is its own reward. Just
not right this second.

A penny saved, is a penny earned. It just takes a while to
make a dollar. Can America stand the strain.

C