Consumers aren't in a very jolly mood this holiday season. The American Research Group predicts holiday spending will be down 50% this year over last; that would be by far the largest drop in more than a decade. During the last recession in 2002-2003, holiday spending was pared back 1% and 6%, respectively. Rumor has it that Santa Claus has applied to become a bank holding company and could receive federal funds by New Year's.

The biggest losers from all of this are obviously retailers like Best Buy (NYSE:BBY) and Macy's (NYSE:M), who rely on the Christmas profits to keep 'em charging ahead for the rest of the year. One of the only bright lights has been Wal-Mart (NYSE:WMT), which had been able to effectively "scale down" and capture the spending of consumers who might have otherwise been part of the "fake-it-till-you-make-it" crowd.

But another, perhaps overlooked, victim of consumers' gloomy mood will be credit card processors Visa (NYSE:V) and MasterCard (NYSE:MA). Not only will they be stung by the inevitable drop-off in consumer spending, but what little spending is left might go to a relic form of payment that some may have forgotten even exists ... cash!

I know, it seems like insanity, but consumers are actually insisting on buying things only if they have real money for them. Big retailers across the nation are reporting a marked pullback in the amount consumers are charging on credit, saying they are instead opting to use either cash, check, or debit. And it makes total sense: As the global recession/depression heats up, consumers wary about their future earnings potential are hesitant to come within a mile of anything debt-related.

What does all this mean for Visa and MasterCard? Here's what the two look like when broken up between credit and debit payment volume in 2007:

Unit

Visa

MasterCard

Credit

$1.9 trillion

$1.6 trillion

Debit

$1.9 trillion

$628 billion

The obvious question is what amount of former credit transactions will simply become debit transactions, compared to the amount that consumers will spend with actual cash or checks. There's no dependable way to ascertain what that amount will be; we'll simply have to wait until next quarter's results come out.

The big issue on investors' minds these days is whether Visa and MasterCard can now be tagged as value stocks amid the market's swoon. Both have bright futures, but much of that is based on the global consumer, who has fallen off a cliff in the past few months.

More on Visa and MasterCard's valuations:

Fool contributor Morgan Housel doesn't own shares in any of the companies mentioned in this article. Wal-Mart Stores and Best Buy are Motley Fool Inside Value recommendations. Best Buy is a Motley Fool Stock Advisor pick. The Fool owns shares of Best Buy. The Motley Fool is investors writing for investors.