U.S. credit rating downgraded

A day after Standard & Poor's rating agency downgraded the U.S. credit rating to AA+ from its top rank of AAA, there were more questions than answers Saturday about what effects the move will have on the economy and American consumers.


Explainer: What difference does the U.S. credit downgrade make to the economy?




The United States' topnotch credit rating is no more, potentially leading to a ripple effect.

With the country's trust factor dented by political haggling in Washington, the fallout has the potential to affect mortgage rates, credit card bills and boost borrowing costs for American consumers and companies.

The downgrade could further weaken an already-fragile economy by undermining investors' faith in U.S. bonds, increasing borrowing costs and further slowing whatever chance there was of a recovery.

It could also increase the cost of home mortgages, auto loans and other types of lending tied to interest rates paid on U.S. Treasuries.

JPMorgan Chase estimated that a cut would raise the nation's borrowing costs by $100 billion a year, Bloomberg News reported.

Once considered good as gold, the U.S. credit rating downgrade comes as the number of corporations that can claim the prized AAA rating has fallen, as well.

Thirty years ago, close to 60 companies had AAA credit, while only four corporations can now make that claim.

Until Friday night, 17 countries still had the AAA rating.