-- On card No. 3, you owe $1,000.

On the first card you have a credit utilization rate of 90 percent. That's too close to maxing out the card. The second card has a utilization rate of 20 percent. You want to keep your rate at 30 percent or less. The third card has a utilization rate of just 10 percent.

"The best and easiest way to get a great FICO score is by living safely away from the edge," Watts said.

Add up the outstanding amount you owe on all the cards and you have a total utilization rate of 40 percent. Even though you have a high balance on the first card, the overall utilization rate isn't too bad.

But what if the lender for the second card reduces your credit limit to $2,000 from the previous $10,000?

You used to have a utilization rate of 20 percent on that card, but now you're maxed out. Lowering that limit also affects your total utilization rate, which is now about 55 percent.

The reduction of the available credit on the second card could have a domino effect, causing your other credit card issuers to increase your interest rates or cut off your access to credit. They may view you as a riskier customer even though you haven't changed your borrowing behavior. For many people, the reduction in credit limits or cancellation of cards is going to hurt them financially.

But there's a blessing in this situation. I was once dumped by a jerk of a boyfriend. It was the best thing that could have happened to me. Sometimes being dumped is just what you need to end an unhealthy relationship you couldn't bring yourself to sever.

It would be great if the long-term impact of this credit crunch is people relying on less credit and more on cash.