Signature of credit cards

That's discouraging for those who want to see banks pumping liquidity into the economy. "The credit engine needs a tuneup," says Jim Powers, an Equifax assistant vice president.While it's not surprising that banks are pulling back on unsecured loans as card defaults and delinquencies surge, "what's remarkable is the very sharp decline in lending," says Mark Zandi, chief economist at Moody's Economy.com.The drop signals a shift in mind-set by issuers, which historically have raised credit card limits through booms and busts.The government has tried to stimulate overall lending by funding securities backed by assets such as credit cards and mortgages. It's also injected billions of aid into banks in return for preferred stock.But in the credit card market, policymakers are working at "cross purposes," Zandi says. President Obama recently signed a law imposing far-reaching restrictions on cards, mostly starting in February . Those will likely lead to even fewer cards being issued, Zandi says. Style of credit cards Still, if this trend means issuers are "doing better underwriting, that could be a positive thing," says Lauren Zeichner Bowne of Consumers Union, the publisher of Consumer Reports. What worries consumer groups, Bowne says, is that issuers are closing inactive cards and slashing limits even for responsible consumers.Despite massive government efforts to bolster the credit market, banks are pulling back severely on card lending.In the first four months of the year the latest data banks issued million new credit cards, a drop from the same time last year, according to Equifax credit bureau data. Low-risk borrowers can still get credit, but they're getting less than before. The average limit on a new card, after rising during the recession, slipped so far this year to Banks and credit card companies counter that stores don't want to pay their fair share. The Electronic Payments Coalition, a group representing the banks and credit card issuers Visa and MasterCard, says that interchange fees are just a cost of doing business and that the fees are negotiated. Shawn Miles, MasterCard group's head of global public policy, said in a recent briefing paper that merchants benefit through "higher sales, guaranteed payment, protection from fraud and offering customers a safe, secure and convenient way to pay." The National Retail Federation, which represents retail companies of all sizes, estimates that U.S. retailers collected billion in interchange fees last year. An average of out of every Americans spend goes to transaction fees, and the federation estimates the fees cost the average household a year. Three bills are pending before Congress that would give merchants the ability to collectively negotiate for lower credit card fees. The credit card industry says that would violate antitrust laws. Miles wrote that when the government mandated lower interchange fees in Australia, "merchants pocketed the savings." The fundamental challenge is that in most business relationships, both parties have the ability to negotiate, and in this case we do not," Rebelez said. "We're not asking for a bailout, we simply want to negotiate in good faith with credit card companies in the same manner we negotiate with thousands of our other business partners."Almost all of these credit card fees are attributable to credit card swipe fees, according to the convenience store trade group. Since more and more customers are using credit cards for small purchases, in some transactions, the store "actually loses money," Rebelez said. The Eleven petition drive will continue through Aug. Top signature gatherers from each of Eleven's seven U.S. geographical divisions will be flown to Washington to deliver the signatures to Congress.The card companies merely pick a rate and then they charge away no notice, no discussion. In fact, we rarely know before we start paying higher fees that the card companies have new rates," said Keith Jones, a Eleven lobbyist. Fair share.