This is about much more than credit cards and home mortgages!

The expression "seed money"? The farmer borrows the money to buy the seed to plant the crops. When the farmer sells the crop he/she pays back the loan with interest. If credit is too tight for the farmer to buy seed, he/she plants less and harvests less. Less food supply means prices go up.

A company makes a product but does not have the income until the buyer of the product pays for it. How do they make the payroll for the people who make the product? A short term loan. Too tight credit means they can't get the money to meet payroll.

Tight credit will not change my use of credit cards one iota (yes I have them and use them. But they work for me. I pay the balance off each month so I get the float without incurring any interest. I have never paid interest on a credit card and I use them daily.)

But tight credit will hamper the ability of businesses to do business.

You rent so who cares about mortgages? Whoever built the structure you rent undoubtably borrowed the money to build it. And the builder borrowed the money for the construction.

And if credit is tight -- the building of housing stock -- rental as well as ownership -- goes down. And if there is less housing stock? Rents go up.

How about cars? Tight credit means you will have trouble getting a loan to buy a car -- new or used. Tight credit also means car dealerships cannot borrow the money to buy the cars to have on the lot for you to buy.

So, if the dealers cannot buy cars to put on the lot the car makers are stuck with inventory they cannot move. If they can't move inventory they won't make more cars. And the car factory workers get laid off. And of course it "trickles down" from there because the auto worker now does not have money to spend.

This is a situation that requires us to look beyond our own backyard. No one is an island and no one -- whether you pay cash for everything or not -- is unaffected by this situation.