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The latest outgrowth of the housing crisis, the breakdown on Wall Street, threatens to gradually corrode economic activity on Main Street, mainly by disabling the credit on which so many everyday transactions depend - but also by frightening people.

Lenders of all types had already been raising the bar for borrowers, turning away all but the best customers. This week, they became even less willing to part with their money, further crimping budgets and family spending.

An economy propelled by easy credit for more than a decade is fraying as credit disappears. American Express, to take one striking example, is reducing the maximum credit limit for half of its tens of millions of cardholders.

The credit shock is in some ways reminiscent of the 1973 oil embargo, which "came into people's lives right away," said Andrew Kohut, director of the Pew Research Center, the public opinion pollster. Then, Americans were forced to line up for gasoline and turn down their thermostats in winter. Though less visible, the credit squeeze, if it persists, will force businesses and consumers to cut spending more than they already have.

"We have moved into a decline in consumer spending, which normally happens only in a major recession," said Ethan Harris, chief domestic economist at Lehman Brothers. He calls the experience "a slow-motion recession in which economic growth will be near zero for an extended period of time."

Consumer spending accounts for two-thirds of American economic activity and has been slowing as the value of homes falls. Although the economy is not yet in a formal recession, consumer spending in June and July grew only because consumers paid more for the same goods. After factoring in higher prices, they actually bought less.

Borrowers are finding that the nation's lenders are tightening up in numerous ways. American Express is hardly alone. After several banks said they would not lend the asking price, a tractor-trailer dealer in North Carolina had to cut the $20,000 he was seeking for a second-hand tractor to $14,000. And a commercial real estate agent, trying to raise $4 million by refinancing an apartment building, got only half that amount from the Bank of Smithtown on Long Island, even though the building was appraised for $10 million.

"With marginal lenders in trouble, we have more people than ever coming to us for loans," said Brad Rock, chairman of the Smithtown bank. "So all of a sudden, we can be much pickier in deciding what loans to make and how much to lend."

Being pickier means that an American Express cardholder whose maximum has been reduced to $1,000 from $1,200 has that much less to spend on clothing or meals out, purchases that lift the economy.

At $14,000 for a used tractor, a trucker, caught in the same squeeze as the dealer, would lack a sufficient down payment for a new tractor, which costs more than $100,000. Indeed, many truckers in this situation find themselves looking for other work, even as job seekers across the nation outnumber job openings by more than 2 to 1, the biggest mismatch since 2004, the Bureau of Labor Statistics reports.

And the commercial real estate agent is shy $2 million that would have been invested in a new venture to generate economic growth.

Mr. Rock, also chairman of the American Bankers Association, with 8,400 affiliates, does not see a problem in this turn of events.

"Now people are going to actually have to have a job to get a loan and they are going to have to make installment payments that are already higher per dollar borrowed than they used to be," he said, arguing that the debt-fueled prosperity of the