Even people with long credit histories who make credit card payments on time are seeing credit lines reduced, interest rates increased and fewer offers in the mail for new credit cards.

Major banks, which already have suffered heavy losses from the mortgage crisis, are scrambling to minimize their risk as more Americans are falling behind on credit card payments at an alarming rate.

"What we are seeing is people have fairly significant balances on their cards," said Steven Katz, director of consumer education for TrueCredit.com, the consumer branch of TransUnion. "In the past it was OK to have these balances as long as they were making the minimum payment due.

"The problem now is credit card companies are very focused on making sure the credit they are lending has a good chance of being repaid. So if you are making only the minimum payment or if you've been more than 30 days late a couple of months in a row, they'll raise the interest rate, close the card or lower the credit limit on the card."

Almost anyone who had a name and address could qualify for a credit card not too long ago, but more card companies are shifting their marketing goals from quantity to quality while keeping a sharp watch for any sign of financial hardship. Credit card payments are often the last bills to get paid when there's not enough income to meet household needs.

The recent surge in credit card "charge-offs" -- debt the lender no longer expects to collect -- is a sure sign that more people are not able to pay their bills on time. Charge-offs for store credit cards hit a three-year high of 10.5 percent in December, which is 49 percent higher than a year ago, according to Fitch Ratings' latest Credit Card Index. Charge-offs on all types of credit cards increased 44 percent since November last year, according to a Dec. 31 report by Standard & Poor's.

As more people join the ranks of the unemployed, credit card losses will rise, analysts predict.

"When people lose their jobs, they'll pay their mortgage or rent first and then food," said Ben Woolsey, director of marketing for CreditCards.com in Austin, Texas. "Banks are at risk because they are lending this money that's unsecured.

"If it's not paid back, there's no recourse. All they can do is hurt your credit score and harass you by phone. The effect of delinquencies going up and losses going up for banks will increase the cost for everyone. Banks will be forced to increase the cost of credit."

Peter Garuccio, a spokesman for the American Bankers Association in Washington, D.C., said federal data suggests that consumers are shifting their spending habits away from revolving credit. Consumer credit outstanding dropped $3 billion from October 2007 to November 2008.

"There has been a shift to debit card usage," he said. "People are relying on credit less, given the economic environment."

The Federal Reserve recently adopted new regulations on credit card practices and disclosure that will fundamentally change the relationship cardholders have with their creditors.

Some of the changes include easier-to-read monthly statements, a ban on raising interest rates on existing balances unless the customer was at least 30 days late paying the minimum, elimination of "universal default" that allowed a company to raise a customer's interest rate if he was late paying another creditor, and elimination of double-cycle billing.

President Barack Obama also has said he wanted to establish a Credit Card Bill of Rights that would include a five-star rating system for cards so customers can quickly understand major provisions of a credit card without reading fine print on lengthy documents and forcing card companies to apply interest rate increases to only future debt.

"Credit card issuers can increase your rate on the debt you are carrying," said Bill Hardekopf, chief executive officer of LowCards.com, based in Birmingham, Ala. "Prohibiting this would be a good move for consumers because the debt you had before the rate increase will remain at the same interest rate."

The Federal Reserve and both houses of Congress have taken steps to tackle the issue of credit card reform. Sweeping changes also are under way within the credit card industry itself.

"It's an industry that's tightening up," Mr. Hardekopf said. "A customer with a credit score that is average or less than average will see [his] limits reduced and it will be harder for [him] to get a card.

"If you do anything as a consumer to lower your score or raise your risk, you might see an increased interest rate or a decreased limit."

According to global market research firm Synovate, which has an ongoing Mail Monitor survey, mailed credit card offers during the second quarter of 2008 were down 17 percent from the same time period last year. In fact, card mail volume was the lowest it's been since the fourth quarter of 2003, the survey found.

"Industrywide, there is a retrenching and reassessment of risk," said Scott Crawford, chief executive officer of DebtGoal.com in San Francisco. "Consumers willing to take on new debt is also down. Unemployment is up, and consumer confidence is down.

"Banks are not lending as much, and consumers are using less credit. They are both good factors. They both represent a much needed correction. For a lot of people it's a healthy thing that banks are retrenching. It reinforces their own saving initiatives."