Why do debit and credit cards have expiration dates?

You may have noticed that on the front of your credit and debit cards there’s a date. That’s the expiration date for your card. Expiration dates are usually three or four years from the date your card was issued. But why does your card have one?

Why do cards have expiration dates?

The expiration date for your card serves some very important purposes. Not only do they help keep your information secure, but it also helps to keep you up-to-date on the latest your issuer has to offer and ensures your card is in good condition.

Fraud prevention

The expiration date on your credit card is a checkpoint. When you use your card, the expiration date is an added data point that must be verified. This provides an extra level of fraud protection, for example, during transactions where your card isn’t present. If someone who isn’t authorized to use your card attempts to purchase something online, and they don’t have the expiration date, it most likely won’t be possible. “It just makes it harder for someone to initiate a transaction using stolen card credentials,” says Jason Oxman, President and CEO of the Information Technology Industry Council, “You may have the card number, but you don’t have the expiration date.” If a thief is trying to use your card number to make a purchase and can’t produce the expiration date, that will be a red flag for the merchant to stop the transaction.

Card security updates

When your card expires, you are issued a new card which must be authenticated. This new card will likely have updated bells and whistles that your card issuer has been developing to keep your data secure. For example, you may notice that your updated card has some new technology, like an EMV chip or contactless capability. “It gives [your issuer] an opportunity to update the card with a new logo or design and get the consumer to use a new card technology,” Oxman says.

Account renewal

Your credit card expiration date gives your issuer an opportunity to remarket their services to you and offer changes that may be a better fit for your needs. When your card expires, you’ll have the chance to decide whether you want to renew it. This is  a good time for you to go over your credit card agreement to make sure that the terms and conditions are meeting your needs. Consider your card’s rewards structure, added fees you pay regularly and your interest rate, among other things. Your issuer may take the opportunity to market new credit card services to you. If you decide your card is no longer meeting your needs, see if your issuer offers a card that may better suit your spending. You can ask about making a product change during your renewal period, rather than closing the account altogether, and forgo any negative effect on your credit score.

Card upkeep

Credit cards and debit cards may seem invincible, but they do wear out. If you’ve ever been in the checkout line trying to use a card with a worn out magnetic strip or EMV chip, you know this from experience. With repeated use, magnetic strips and chips can become less sensitive or damaged from exposure to the elements. When your card is replaced, you will be able to use it at optimum sensitivity once again.

Renewing your credit card

You don’t have to do anything extra to get a new credit card once your old one is about to expire; your issuer will automatically take care of that process. You should receive some kind of notification in the mail or via email about a new card being on its way as the expiration date approaches. If you aren’t interested in continuing your credit card service, this would be a good opportunity to notify your card issuer that you don’t wish to renew. If you do choose to renew, the next step is receiving your new card. You should receive a new card 30 to 60 days before your old card expires. If you’re planning a move during that time frame, contact your issuer to update your mailing information. You’ll also want to contact your issuer if you plan to be away from home when your card is scheduled to arrive. Ask if you can receive your card before your departure date or if they can hold off sending it until you return. Once your card arrives, you will have to activate it before you can begin using it. If you use your card for any automatic payments, like a utility bill or subscription service, you’ll need to contact those service providers to update your card information.

What to do if your card doesn’t arrive

You’ll receive written notification when your new card is on the way, but if it doesn’t arrive within two weeks of receiving that notification, contact your issuer. Your card may have simply been lost in the mail, but it’s also possible that it was stolen. As a security measure, your issuer will send you another replacement card. If your old card is set to expire before the new card arrives, check with your issuer to see what they can offer to keep your card service from being interrupted. In the event that you have to wait it out, be sure to make arrangements with any service providers that will be expecting an automatic payment from your credit card.

Using an expired card

If you use your old card after the expiration date, the transaction will likely be declined. You usually have until the last calendar day of the expiration month before your service will be completely deactivated. At that point, your account will still be active, but your card won’t. You’ll want to contact your issuer to see if a replacement card was sent. And if not, find out why and what will happen with your service moving forward. Whether you have a working card or not, you are still responsible for the terms of your credit card account. This means that you will still be responsible for making monthly payments on any balances you carry, even if your card service is interrupted.

The bottom line

Credit card expiration dates serve multiple purposes, such as fraud protection and card longevity. But keep in mind that expiration dates apply to the physical card, not the account. So when your credit or debit card is set to expire, your account is not.