Best columns: Fake prosperity, Credit-crunch ubiquity

The end of faking the good life

With easy credit drying up, we may be nearing the end of “the standard-of-living bubble,” says Fortune’s Geoff Colvin in CNNMoney.com. With real incomes stagnant for the past several years, we’ve been “pretending that our living standard is still rising” by borrowing on credit cards. Americans started putting plastic in real ATMs when “the home-equity ATM” stopped dispensing cash, but credit card debt is the most expensive type on the menu. Well, credit card debt gets securitized just like mortgages, and banks are deeming those securities increasingly risky. When the card window closes soon, it’s hard to see where we can turn next “to fake living the good life.” Maybe we’ll find it isn’t so bad to live within our means.

How the credit crisis will hit you

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“The credit crunch is the one area that many consumers think they can sidestep if their financial situation is not perilous,” says Chuck Jaffe in MarketWatch. But “credit crunch” is more than a new household word—it’s also a household problem, and in ways “many consumers don’t immediately see.” First, credit spreads—the difference between interest rates a bank charges and benchmark rates—are growing wider, and will stay that way, making financing harder. Punitive fees will “go from bad to worse,” even for the best customers. It will be harder to get a top credit score, leaving more people with “second-level deals.” And for all but the top scorers, expect bigger upfront payments and more paperwork.