The Fed found 85 percent of banks tightening their guidelines for commercial and industrial loans, which were up from June survey which reported 65 percent.

Even further 95 percent of the banks reported tightening guidelines for lines of credit. Number of larger banks reported tightening credit for credit cards and loans where 60 percent of banks responded with tightening credit card debt, while 65 percent responded with tightening on consumer loans.

With Fed survey there is a sign on Wall Street that banks are increasing their credit supply. Even with tighten credit banks are now considering changing their credit guidelines.

For credit cards, banks are still not willing to take any further chances with many borrowers and now many of consumers see their limits reduced. A survey of credit card industry showed that 62 percent of credit companies will plan to reduce lines of credit because of economic conditions.

American Express changes credit limits 20 percent of its customers every year and more limits are being lowered than raised.

Many companies are working on to lower their risks if customer defaults on credit card payment. By cutting credit limits or closing accounts can have a negative affect on credit reports score. One way credit score is calculated is debt to available credit ratio. The closer the debt is to a credit limit, the lower the score.

Any credit changes will be corresponded by bank in writing, in which case you can leave it as is or move your debt into another credit card.

Other chance is to reverse the decision by calling a bank if your credit score is still good. Bank will investigate and provide you with their decision.

If you have a card that has not been used, use it for small purchases which will also help you to increase your score.

Most important part is not to miss a payment. Fees will accelerate after you miss a payment and it will be hard to catch up.

It is important in today's credit crunch to save money. Downsizing is one option as large homes and fancy cars make people look, but behind those fancy things is debt. Right now many consumers should be looking to lower their standard of living.

If you are living paycheck to paycheck avoid credit cards at all cost. If you have credit cards start to lower your debt. Don't use credit cards if not needed and don't always make minimum payments.

To save money you can add to 401K or open up a new account that will withdraw fund from your paycheck automatically and deposits them into high-interest saving account.

As holidays are approaching many consumers will be saving even more and buying only what is necessary. U.S. economy will improve and when it does many consumers will be still paying off their credit balances.