For some time now, the “credit crisis” has dominated the headlines of most financial publications and for good reasons. But for frequent flyers, the future holds a bit of a different take on the credit crisis because in the world of miles and points, it could mean an earning crisis.

There is scant doubt that the use of plastic has changed the course of frequent flyer programs, and in fact, has been the major factor in both the survival and their Achilles’ heel. Let’s take a look. Credit cards as a partner to the miles game came about in 1985 when Diners Club first partnered with two airline frequent flyer programs. The idea being for cardholders to be able to transfer their loyalty currency earned from purchases using the Diners Club card into a frequent flyer mile. After that, airlines added direct bank relationships known as “affinity” credit cards as official partners to their programs. The significance of this among all the hundreds of other “official” partnerships is rivaled only by the decision by AAdvantage and Mileage Plus to decentralize partnerships and begin selling miles to other entities outside of any published partnership, thus extending the reach of the frequent flyer mile as a rewards currency for the masses.

But getting back to the significance of the credit card partnership, it was at this moment that a significant change came about in frequent flyer programs moving them from being self-funded to being fully funded programs. Really, does anyone think that frequent flyer programs could still exist through all the bankruptcies and the economic woes of the industry? Not to mention the cost of a barrel of oil, if these programs were as they started out to be, totally self-funded–paying for themselves based on the “incremental cost” of keeping a passenger in a deregulated industry?

And while travel partners like hotels and car rental companies were a natural fit and nice, does anyone think that the pennies pouring into frequent flyer programs when members rent a car that earns 50 miles per rental day would carry the cost of millions of passengers flying for free? Sadly, the truth as we look back is that the advent of plastic to frequent flyer programs has been the sole factor for why they still exist today. Important? Look no further than the newly arrived Virgin America frequent flyer program. Here’s a program with no partners of any kind, which took nearly 15 months to introduce their award chart after the launch of the program (surely a world record!) and is strongly rumored to be near a credit card deal for the program–talk about priorities! With credit card partners buying billions (yes, you can capitalize the word Billions if you like) of dollars in every currency imaginable from airlines globally on an annual basis, they have ensured that credit cards remain a valuable component of both the industry and, of course, an important component of FFP membership.

Now for the downside? This success doesn’t come without a price. With nearly 60 percent of all miles being earned coming from non-flight activity, and chief among those miles from the use of credit cards, they have increased the pressure of award redemption to new highs. Imagine a world in which award redemption was based solely upon the miles you earned by flying. It once was that way, but credit cards more than anything changed the rules. More miles from a growing variety of partnerships in these programs (really, does everyone you know who belongs to an FFP fly 12 or more times a year?) has propelled competition for the seats on airplanes to new heights. But while these plastic miles are responsible for the increase in redemption demands, they are also the reason why airlines can “afford” them. How big is the impact of plastic? I estimate that the largest account for frequent flyer miles in the world has more than 100 million frequent flyer miles in it–mainly earned by plastic. The highest number of miles earned by actually flying? About 18 million (including bonuses). Measure that difference yourself.

And now to my story. This credit crisis is beginning to have a major effect on the average frequent flyer who is seeing this lifeline of miles suddenly reduced in capacity. The number of frequent flyers contacting me about the loss of their credit limits and even card cancellations is growing. Raising rates and the tightening of terms of payment mean that the frequent flyer mile as we know it gets much more expensive to earn. Is there any reason why we’re seeing increased bonus offers to acquire new credit cards rise above the standard 15,000-20,000 bonus miles? The latest (and some say greatest) Hilton HHonors credit card offer can earn a member 62,500 bonus points in that program.

Yes, the credit crunch is coming home to roost on the frequent flyer, and while it means more generous offers in some areas, it also means the loss of lots of miles for those who have come to regard this as the savior to inflation. No credit means no miles. And while this may not look good to some of you, fewer miles will mean less demand come time for redemption, and that favors the flying public. But without credit card miles (funding), the industry might have it’s own internal “credit crisis.”