Associated Press is out with a thoughtful analysis on whether this is the end of easy credit (I think it is). The appetite for credit will be dampened not only because banks will be tightening the screws but because consumers will begin to clamor for less credit as well, says AP.
Has a new day dawned? Will consumers really start living within their means? Is a seachange afoot? The story does a good job of covering those questions.
From the story: Is The Era of Easy Credit Over For The Long Haul? (link here)
"I think we're undergoing a fundamental shift from living on borrowed money to one where living within your means, saving and investing for the future, comes back into vogue," said Greg McBride, senior analyst at Bankrate.com. "This entire credit crunch is a wakeup call to anybody who was attempting to borrow their way to prosperity."
And this quote, which suggests that consumers could temper their own enthusiasm for credit:
The new era of tighter credit will largely be a mandate, as consumers are forced to adjust to tougher rules and tighter limits. But consumers have also begun showing signs of a change in mind-set, putting off purchases, buying less expensive substitutes, going out to eat less, and rethinking their propensity to do so on credit.
For now, I believe that consumers are changing their habits. Whether that change is permanent remains to be seen.