Credit Card Crunch?

In the midst of the housing crisis and credit crunch (mainly mortgage loans, business loans and lines of credit) lurks the possible end-all of the American financial system - the credit card crunch!
The magnitude of the potential damage that will occur in our global economy can be prevented if both politicians and bankers actually use the brains they claim to have and stop what is already occurring. Let me explain.
The credit crisis has already affected millions of Americans and may affect millions more in the upcoming years as the major banks that make up the allocated credit available to consumers plan to cut half of the available credit on the market. This is not just those cardholders with high limits and late payments; this is an approach that will alter every aspect of our current financial system and every person who has a card in their wallet.
Recently, many good-standing consumers have seen their interest rates skyrocket and credit limits plummet with little explanation from the credit card companies. With fed rates so low, how can they now justify, in a more difficult economy, this hike in rates?
If a $10,000 card balance on a $20,000 limit was at 12%, the minimum payment would be around $180/mo. That person's credit report would still show a favorable score since 50% of the limit was still available.
Now the credit card company retracts the line to $10,500 and increases the rate to 28%, thus the payment is increased almost double. The applicant can try to balance transfer, but wait, the retraction of the original limit most likely lowered the applicant's score thus making the applicant a higher risk.
The truth is the credit card is a prime economical tool for consumer spending. Roughly 45% of card holders have a monthly revolving balance. What will happen when that is taken away?