Photo (cc) by Robert Scoble
This post comes from Bill Hardekopf at partner site LowCards.com.
Why do credit cards have expiration dates? Do those dates represent times when the cards will no longer work?
There are several reasons behind the “good through” date you see on most credit cards, and some of them may surprise you.
Identity theft prevention
Whenever you order something online or over the phone, chances are you will be asked for your credit card expiration date. That is because this is another form of identification that protects your card from getting charged without your permission. Most customer service representatives will ask for the expiration date and CVC code on the back of the card as a way to determine if the card is yours. They may also ask for the ZIP code of the card’s billing address, which is a feature not specifically listed on the credit card. All of this is meant to minimize your chances of becoming a victim of identity theft.
Credit card replacement
If you use your credit card regularly, it will start to wear down. Every time you swipe the card, put it in your pocket or take it out of your wallet, it gets a little more worn. Eventually, that wear will make your card difficult to use. Credit card companies put expiration dates on their cards so they can send you a new card that will always work.
This replacement also gives the credit card company the opportunity to give you a card with a new design on the front. If they have updated the look of the card, they want you to promote that look for them every time you use the card. An updated card is more tempting to use as well, which means that you are likely to make more transactions with it. That works in the issuer’s favor.
Credit limit adjustments
When your card approaches its expiration date, your credit card company will assess your current credit standing. This will allow them to see if you qualify for a higher credit limit or if they need to lower the one you currently have. Hopefully, you have taken the steps necessary to warrant a higher limit. If your limit drops, ask the company why so you can improve on that in the future.
What to do before and after your expiration date
If you notice that your credit card’s expiration date is approaching, you can call the credit card company to check on it. In most cases, they will already have a plan in place to send you a new card when the old one expires. This will happen about a month prior to the expiration date, so you will have plenty of time to activate your new card.
If you don’t have a new card a couple weeks before the expiration date, call and ask for a replacement card. Do not report the card as lost or stolen unless you want a new credit card number. Note that some companies will charge money for your replacement card if it is lost or stolen.
If you have your credit card account saved for automatic bill payments, you will need to log in and change the expiration date on the card. Otherwise, your payments will be declined after you activate the new card. It is advisable to develop a list of all the bills that automatically get paid with your credit card. This will make it much easier to change these autopay accounts when you receive a new credit card.
Why do credit cards expire? To protect you and the credit card company. As long as you get new cards before your current ones expire, you should have no issues at all.
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