Why Credit Cards Expire

Have you ever wondered why your credit card has an expiry date? What’s the expiration date for? After all, It’s made of plastic (thus, it won’t go bad) and you don’t see the reason why you have to curb your spending after the date that is printed on the card face. What good do these expiry dates have anyway?

Well, there are several reasons why credit card companies include an expiry date in their credit cards. The first reason is for fraud protection. To verify if the user of the card is truly the card holder, most non-personal transactions (those done over the phone or over the internet) ask for this information and the expiry date becomes one of the many verification points, with the security number at the back of the card being another point, which a faceless purchaser needs to pass.

The other reason why credit cards expire is because of the little strip of black that’s at the back of each card. This magnetic strip is not just for decoration. It contains vital information about the card, the card holder and the account. A magnetic strip has a lifespan of between two to four years. After four years, the magnetic strip loses it’s effectivity due to cracks or scratches and no longer functions the way it should. In addition, after a few years, there may be updates or improvements on the magnetic strip (or the credit card company’s system) and the expiry date provides both the company and the card user an opportunity to get the upgrade.

Another possible reason why there are expiry dates on credit cards is to give card companies a chance to evaluate you as a client. It is a time for them to reassess or to remind you of their services. You should also take this opportunity to update the company of any changes in your personal details (address change or maybe change in your marital status).

So what do you do when you realize that your credit card is about to meet its maker? You should naturally, watch your mailbox and wait for your replacement card with breathless anticipation. Card companies normally send a new card a few weeks before your existing card expires, so you won’t have to drastically change your spending patterns.

If you’re scheduled to be out of town (or out of the country) a month or so before and after your card expires, you may have to call the bank and inform them of your travel plans and ask if they can send you the replacement card earlier, ideally in time for your departure. Nothing could be more frustrating than to suddenly be deprived of your card charging capabilities when you’re in another land.

Once you’ve received your new card, check if the details indicated on your statement are the same. If you would like to renegotiate with the card company (ask for a higher credit limit, for example), now is the time to do it. If you are satisfied with everything, you should cut your old card in half (the magnetic strip may be used by technologically proficient identity thieves). Once all that is out of the way, you can now rush off to the nearest store and celebrate. Check if your card works by purchasing that new pair of jeans and charge it.

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