Whether it’s due to a higher rates and lower card limits or a general shift to spend less and save more, Americans are still using their credit cards at a declining rate. Of course, higher rates of joblessness will also put a damper on our desire to break out the plastic.

For the seventh consecutive month, balances on U.S. consumer credit cards fell. August witnessed a drop of 5.8% on an annualized basis, or $11.98 billion in raw dollars, according to new stats from the Federal Reserve.

On one hand, this does warm the heart of everyone who likes seeing credit card companies profit less from their stranglehold on the American economy.  Regardless of whether it’s by choice or not, lower credit card balances means more financial freedom and a chance to put hard-earned wages to better use than paying 28% interest.  However, less card use also correlates to less shopping, which is the linchpin of our economy.

So on a micro level, saving and investing helps the individual and their family.  But on a macro level, if everyone cinches their wallets then business will close, more people will be out of work and savings will quickly be used up when those job losses hit home.  We are at a very difficult time in our history, where what’s best for the individual isn’t what’s best for the nation.  Relying on the wealthy to shop us into a rebound isn’t a sound strategy, considering that even the rich are cutting back.

For us to get back on our collective feet we need a stable (if not growing) job market and a higher rate of consumer confidence leading to more spending.  Too bad this is a chicken-and-egg situation.  Businesses won’t start hiring until people start spending again, and it’s insane to ask people to spend when their jobs are tenuous at best.