Credit crunch is a situation when the availability of credit becomes very limited and the interest rate is also become high. Experts say that careless and irrational behavior of the lenders leads to the loss for the lenders and when the loss touches zenith then they try to restrict the credit and the market falls into the credit crunch. At the time of credit crunch lenders try to give loan only to the secured borrowers. Recession is sometime conceived same to credit crunch. But both are characteristically different, although recession always comes with credit crunch.
Here is a funny song that you can enjoy if you need to refresh yourself from this credit crunch.