By TRACEY DRURY
tdrury@bizjournals.com | 716-541-1609

It's been six months since the federal government began implementing major changes in how credit cards are issued, billed and controlled.

Several more changes are coming before year's end, with the first slated for this week.

The changes are part of the Credit Card Accountability, Responsibility and Disclosure (CARD) Act of 2009, designed to give credit card customers better protection, control and predictability over their credit.

The changes taking effect in August include three main provisions:

• Credit card issuers must begin reducing interest rates to previous levels after six-month reviews of payment records on accounts that have been increased.

• Credit card fees for paying late, exceeding the credit limit or other violations must be reasonable and proportional to the violation.

• Gift cards must be valid for at least five years, with dormancy fees banned for 12 months.

Since the first provisions took effect in February, a series of additional provisions have become active. These include a requirement that companies claiming to offer "free credit reports" are now required to prominently display disclaimers on their Web sites stating the service might not actually be free.

Additionally, several reports were due to Congress about financial literacy, lowered credit limits and increased interest-rate trends by card issuers. They also will address whether credit plans for small businesses are fair; and if federal rules on unfair or deceptive credit card practices and disclosure had an impact.

Already, anyone with a credit card should have noticed major changes in the way information is presented on their monthly statements. The way debt is paid off also changed, with excess payments going first toward higher interest rate balances. Credit card issuers are banned from implementing retroactive rate increases and unfair fees.

The American Bankers Association says the new rules provide consumers with numerous tools for better management of their credit costs. Kenneth Clayton, senior vice president and general counsel for ABA card policy, said in a prepared statement the new rules will provide greater protection, transparency and certainty for credit card customers.

"Most customers handle their credit cards responsibly, but bad behavior by a relative few - such as missing payments or exceeding credit limits - increases costs for all customers," he said. "The rules adopted by the Fed today address so-called ‘penalty fees' and seek to ‘make the penalty fit the crime,' so that simple missteps result in minor penalties, while larger or repeated missteps can result in higher penalties."

Kate Beck is director of community outreach for Consumer Credit Counseling Service of Buffalo Inc., a nonprofit agency based in West Seneca. She said changes began earlier this year that consumers will benefit especially from are interest rate protection and elimination of the universal default clause, which allowed one credit card to raise your interest if you missed a payment with another account.

The new restrictions on fees also will be helpful, she says.

"Obviously it's a good part for them," she says. "The fact they're regulating some of that - the rates and fees - is going to be a huge help for consumers in the future."

Complete information about the CARD Act can be found online at CreditCards.com, an online publisher of consumer credit card related news, or federalreserve.gov.