By Sarah Marsh

HAVANA (Reuters) - U.S. banks are failing to take advantage of looser U.S. restrictions on trade with Cuba and the lack of financial services is hampering U.S. travel and business opportunities, former Secretary of Commerce Carlos Gutierrez said on Thursday.

U.S. President Barack Obama loosened rules on financial services earlier this year, shortly before his historic visit to Cuba, as part of the normalization of relations between the former Cold War foes. But banks have been slow on the uptake, burnt by past sanctions for breaking the embargo.

Only one bank, Stonegate, <SGBK.O> has so far issued U.S. credit cards that can be used in Cuba, so most American travelers have to rely on wads of cash. Companies meanwhile complain they cannot get credit to do business with Cuba.

"Where we have the biggest room to move is on the financial side," said Gutierrez, a Cuban-American and chair of the U.S.-Cuba Business Council, in a phone interview.

"We are at the stage where we can (theoretically) invest, we can use credit cards but we are just not doing it because the banks are not cooperating. They are not getting into the game, they are not getting into Cuba."

Since announcing a historic detente in December 2014, Democrat President Obama has used his executive powers to hollow out a half-century-old U.S. trade embargo on Cuba that only the Republican-controlled Congress can lift.

Washington has, for example, given special permission to U.S. airlines to start scheduled flights to the island later this year and to an Alabama company to build tractors there.

The lack of financial services, however, poses big hurdles to business endeavors like these, said Gutierrez, who is also co-chair of consulting firm Albright Stonebridge Group.

Airlines will have to find alternative ways to collect excess baggage fees as virtually no U.S. credit cards are accepted in Cuba. Meanwhile, the Alabama company is self-financing a $5 million to $10 million plant.

"Financing is important for manufacturing and also if we want to sell Cubans major infrastructure projects," said Gutierrez.

Cuba's long-term trading partners have recently stepped up financing offers in a bid to win investment opportunities on the island before U.S. firms turn up.

"U.S. companies are concerned that a European or Asian company will get in first," said Gutierrez.

Gutierrez said the process of normalization of relations with Cuba was "irreversible" now.

"This is the only election I can remember when both candidates are open to normalizing relations with Cuba," he said. "Maybe they will do it differently but that general direction will continue."

(Editing by Bernard Orr)