In government, business, and consumer spheres alike, Americans have come to rely too heavily on credit and debt, and the dirty secret (or the ugly truth, if you prefer) has finally surfaced. This year, many Americans will face holiday shopping without their usual reliance on credit cards, and that will do a number on many consumer-facing stocks in the near term.

You're a mean one, Credit Crunch
Of course, lending standards need to tighten, and consumers need to better gauge what they can truly afford, not what their sky-high credit lines will allow them to obtain -- and possibly never pay off! Many credit card companies are already experiencing higher default rates, and obviously, tighter credit means many people are finding their credit card limits reduced.

This brewing situation certainly threatens to make the holidays a little less bright this year. According to data from America's Research Group, a whopping 87% of American consumers use some form of credit to help finance their holiday shopping. That's a downright chilling figure when you ponder how many of them are probably over their heads.

Meanwhile, NPD Group is forecasting flat to declining sales during the holiday shopping season, with 26% of people who took the survey saying they will spend less this year, as opposed to 18% who gave that response last year. To add to the overall malaise, apparently there isn't a "must-have" gift this year.

This all sounds like the Grinch got an engraved invitation to this year's Christmas celebration.    

All I got for Christmas was a kick in the teeth
I've seen rumblings about a coming societal shift from a culture of excess to one of frugality, but after so many years of far-too-easy, far-too-much credit, returning to fiscal responsibility won't be a choice for many people -- it'll be a necessity. They'll be forced to remember the concept of pinching pennies and living within their means, not to mention having to actually save money for a rainy day -- or the day when asset bubbles burst and the debris rains down on us all. 

Frugality is not such a bad thing, of course. There was a time when people would have saved their money -- maybe for months, can you believe it, months! -- to buy coveted items like a Coach (NYSE:COH) handbag, a tricked-out Sony (NYSE:SNE) TV, the latest Apple (NASDAQ:AAPL) gadget, or beautiful baubles from Tiffany (NYSE:TIF). Many old-school savers will tell you that that kind of planning actually feels pretty good -- and rewarding.

In a development that may remind some of us of a bygone era, Sears Holdings' (NASDAQ:SHLD) Kmart has been advertising its layaway program. Hey, kids, that's when people get a retailer to hold an item for them so they can make several payments for it over time! That practice had virtually died in recent years, because so many people paid with plastic, but now layaway may be on its way back.

Anyway, it's going to be ugly this Christmas season, and I doubt that luxury will be "in" this time around. It's tempting to think that discounters may be the only ones with half a shot of doing very well at all this holiday season. After all, Wal-Mart (NYSE:WMT) and Costco (NASDAQ:COST) are enjoying increased traffic from the economic hard times -- although for many people, it's not so much that they want to trade down to the discount stores as they have to. 

Remembering what the holidays are really all about
In the long run, turning away from the debt-heavy lifestyle will be better for our country and our economy. Many people are starting to realize that much of the economic growth we've seen over the recent years was artificial and completely unsustainable, given the roles of easy credit and asset bubbles.   

And I'm pretty sure that most of us know the holiday season isn't really supposed to be about rampant consumerism anyway. (Sorry, retailers, but it's the truth.)

We investors need to brace ourselves for what's probably going to be a bleak Christmas for retail sales. Then again, there is a silver lining, since to be forewarned is to be forearmed, and bad times don't last forever.   

Investors should stock up on the deep breaths and the metaphorical chill pills and start putting together wish lists of the highest-quality retail stocks -- the ones with plenty of cash on their balance sheets and little or no debt. A few of the companies I've mentioned strike me as good ones to watch and covet: I think Apple, Costco, and Target are compelling for long-term investors' wish lists and could get even cheaper.

For those with strong stomachs, the brutal holiday season will yield some truly dirt cheap retail stocks that will deliver rewarding returns later. Enjoy your holidays … and if you're going to splurge, maybe buying cheap stocks is actually the way to go.

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Apple, Costco, and Coach are Motley Fool Stock Advisor recommendations. Wal-Mart Stores and Sears Holdings are Motley Fool Inside Value picks. Try any of our Foolish newsletter services free for 30 days.  

Alyce Lomax owns no shares of any of the companies mentioned. The Fool has a disclosure policy.