The consumer credit retrenchment is coming even faster and harder than many anticipated. Big box retailers look likely to get coal in their stockings for Christmas as reduced consumer credit limits cut directly into sales. From Bloomberg:
Home Depot Inc., Sears Holdings Corp. and other retailers may lose as much as 8 percent of their holiday sales this year because lenders and stores are clamping down on financing.Almost a quarter of shoppers say banks cut the spending limits on their credit cards, according to a survey by America’s Research Group, which also provided the sales-loss estimate. More people are being rejected for new cards, hurting sales for bigger purchases. Demand is being pinched just as retailers prepare to enter the holiday selling season, which accounts for as much as 35 percent of their annual revenue.
“Banks just don’t have the money,” said David Bassuk, a New York-based managing director at consulting firm AlixPartners LLP. The tightening credit is putting retailers “at big risk to lose those sales or lose those customers,” he said. “There is a big concern there with the holiday spending.”….
About two-thirds of holiday purchases are made using credit cards, estimates America’s Research Group Chairman Britt Beemer. That excludes gift cards, three-quarters of which are also bought using credit cards, he said. His Charleston, South Carolina-based firm surveys 10,000 consumers a week.
Beemer predicts holiday sales will decrease at least 4 percent, the first decline since he started forecasting in 1979, as consumers grapple with sinking home and stock values. His projections have been correct in 16 of the past 17 years.
Retailers that offer zero- or low-interest financing –which is often backed by banks — may also rein in the credit they extend to shoppers to avoid being left with bad loans when customers can’t pay them back…
A quarter of consumers polled in a Standard & Poor’s survey released Oct. 15 said they’re at or near the limits on their primary credit card, and 20 percent said they’re approaching the limit on their secondary cards.
River 
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I think when all is said and done, an 8% reduction in retail sales for the holiday season is the rosy scenario.
Americans just don’t seem to understand what is in store for them.
Matt Dubuque