Why do Credit Cards Have Expiry Dates?

Apart from the long 16, 17 or 18 digit set of numbers that identify your account, there is a shorter series of numbers that make up your credit card's expiry date. Most people don't pay much attention to this date, but it is actually a very important security feature that credit card companies and retailers use to check your authenticity when you make purchases online and over the telephone.

Why does my credit card expire?

One of the simplest reasons why your credit card will expire is that the magnetic strip on the reverse of the card does not last forever. Although the plastic card itself is virtually indestructible (as anyone who has ever tried to dispose of one will know) the magnetic strip is liable to break free from the card or eventually wear out. When this happens your card will no longer be able to be read by credit card terminals or cash machines.

Some institutions use an expiration date as a way of reconnecting with the cardholder. It gives the company and the user the opportunity to get in touch with each other and the company an opportunity to try to convince the customer to upgrade their account, or open a new one. With so much competition out there, keeping in touch with people is essential for retaining customers.

Credit card expiry dates also allow the credit company a chance to check up on their customers and make sure you are who you say you are and nothing has changed. Because identity theft is such a big problem for credit card companies it is essential that they do this. People affected by identity theft have credit cards opened in their names without their knowledge and then purchases are made. If the card expires, the company will contact you, which could be the first time you find out about fraudulent activity.

For people who don't use their cards very often, getting in contact with customers can be a gentle reminder to use your plastic.

How to Renew your Card

Renewing your card is easy. About a month before your current card is due to expire, a new one will be sent to you, replacing your expired one. If you are going to be away when this happens, difficulties can arise. If you are planning a trip for longer than a few weeks it's important to check that your card won't expire when you're away. If it does, you might find yourself cut short, and suddenly unable to spend any money! If you realise that your card will expire before you get back, call your credit company and and arrange to get your new piece of plastic before you leave.

Once you have your new card, it is important to read the material that comes with it. Your terms and conditions may have changed and your interest rates and penalty charges may have increased. If you find that this has happened you should contact your card company and demand that they be put back to what they were originally. Do not use the card until you have received verification that the terms have been changed to your approval. If they refuse, you can always cancel the card and find a better deal somewhere else. Threatening to leave your company could also be all you need to do for them to bring your terms and conditions back to normal.