We all know credit is tight, and we all probably figured it would get tighter, but now we’re seeing it seize in some very uncomfortable places, namely, literally, your wallets. The July 2008 Senior Loan Officer Opinion Survey on Bank Lending Practice, out today, says:

About 65 percent of domestic banks—up notably from about 30 percent in the April survey—indicated that they had tightened their lending standards on credit card loans over the past three months, and about the same fraction of respondents—up from roughly 45 percent in the April survey—reported having tightened standards on consumer loans other than credit card loans.

On top of that they’re increasing minimum required credit scores on both types of consumer loans; this on top of ever more bankers reporting tighter credit standards on prime home loans and foreseeing that tightening continuing well into 2009. Oh, and lest I forget, about 60 percent of bankers say they expect to tighten their credit standards for approving revolving home equity lines of credit through 2008, 40 percent through the first half of 2009.

What does it all mean? As Americans become more cash-strapped than ever, thanks to still-high oil prices, higher food prices and few jobs, getting cash will become ever more difficult. As American homes bleed money in the form of falling home prices, their owners won’t be able to siphon any of that blood for their own financial circulatory systems.

I get a lot of flack for being negative on the housing “recovery,” but with results like these from the folks who fuel the housing market with the equity necessary for people to buy, sell and exist in their homes, how exactly am I supposed to be positive.

The hit on plastic is kind of the last shoe to drop. As people struggle to make their home mortgage payments, they may need to put those other day-to-day expenses on the card, maybe even get another card. Apparently fewer will now have that option.

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