If you've been following consumer credit, then you know it has been shrinking over the past few years. Revolving credit outstanding, which consists mostly of credit card balances, is down 9% from September 2009 to September 2010. If you go back another year, it's down more than 16%. But this isn't just consumers paying down their debt. Some have stopped using credit cards altogether -- as many as 8 million in the past year, according to credit reporting agency TransUnion. The market is changing rapidly.

So how drastic is the 8 million-consumer decline? It amounts to an incredible 11% drop in credit card users. Now, those who use other forms of payment actually outnumber those who use credit cards 78 million to 62 million, according to TransUnion's data.

This may seem somewhat surprising. As technology improves and cash becomes seemingly obsolete, you might expect credit cards to gain in popularity as a matter of convenience. But less credit card use doesn't necessarily imply that more Americans are turning to cash, though it could. It just means that they aren't using credit cards, in particular. According to Ezra Becker, vice president of research and consulting in TransUnion's financial services business unit:

The vast majority of the consumers who do not possess or have stopped using credit cards continue to have and use other forms of revolving and installment credit, and of course still need to pay for necessities.

There are three reasons that are likely responsible for the growth of this segment of consumers who don't use credit cards. The first is that credit card companies have tightened their underwriting standards. As Congress limited their fees and flexibility, they have stopped providing credit cards to some consumers on the margins who are too risky to be profitable under the new regulatory framework.