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Welcome to the U.S. Financial Crisis: Credit Card Edition. Banks, already battered by bad mortgages, are now bracing for more bad news as squeezed consumers default on their credit cards. They are pulling back on new credit offers and putting stricter limits on existing accounts.

A tighter supply of plastic money was long overdue. But as banks pull back, responsible borrowers deserve some shelter from the fallout.

Lenders have reason to panic. Banks already have written off an estimated $21 billion in bad credit this year and could lose twice that between now and 2010.

The nation's nearly $1 trillion credit-card balance pales in comparison to the amount owed on U.S. mortgages. But credit card debt is riskier. When a customer can't pay his Visa bill, there is no property for the bank to sell to recoup some of its losses.

It will only get worse as credit dries up and unemployment continues to rise. Against that backdrop, banks are trying every trick in the book to reduce their risk.

A borrower might see his credit limit slashed for no other reason than he lives in an area with a high rate of home foreclosures or he works in an industry wracked by layoffs. Cardholders who never carry a balance are getting notices that they better ring up some charges or risk a closed account.

The problem is that lower credit limits and canceled credit cards affect borrowers' credit scores, which in turn could hobble responsible borrowers' ability to get low-interest loans. Those are the very borrowers that banks need more of, not less.

Regulators and lawmakers should ensure that the nation's credit agencies hold harmless prudent consumers who see their accounts closed or credit limits rolled back through no fault of their own.