The credit card-dominated American 'free-spending' behavior over the past few decades is apparently in for a change, with the recession still continuing to deliver its blows. In a situation marked by increase in jobless rates and tumbling home prices, credit card use has been reined in by most consumers.

For an economy that largely relies on the consumers' capacity as well as readiness to spend, the credit card issue pertains to a much bigger problem of making sure that the financial system supplies adequate credit to help the economy carry on profitably.

According to the Fed Reserve figures related to the total revolving debt carried by consumers, nearly 90 percent is card balances. While in 1988, the revolving debt figures stood at $177 billion; in 2008, they soared over five times to $977 billion.

A recent household debt report by the Federal Reserve Bank of San Francisco revealed that consumers had increased their debt load two-fold over the last twenty years.
 
The 2007 data showed that the average household had $1.33 in obligations as against every $1 in personal disposable income.

No wonder, the recession has led to a credit retreat! Daniel Ray, editor-in-chief of CreditCards.com, said marketing practices had helped banks expand card ownership over the last two decades. Ray said: "Issuers developed cards that were cheap up front and expensive on the back end."