All credit cards expire. When the expiration date passes, the card is no longer valid. Credit cards do not automatically renew. Your credit card issuer will send you a new card, but you must accept and activate the card before you can use it. Although it might not seem necessary for a piece of plastic to have an expiration date, there are several key reasons credit cards have expiration dates.
Wear and Tear
Over the years, credit cards become damaged and need to be replaced. The life expectancy of a credit card is only several years. If you use the credit card often enough, the magnetic strip becomes unreadable. According to Bankrate.com, the magnetic strip disintegrates within three to four years. The painted name and numbers on the face of the card also begin to deteriorate. Credit card companies strive to issue you a new card before the current card wears out.
Credit card companies also utilize the expiration date as an opportunity to connect with customers. You may receive a reminder letter before your credit card expires to ensure you do not accidentally ignore or discard the new card. Since credit cards require activation prior to use, the issuer will have the chance to communicate and discuss other products and service. The credit card company may request feedback and evaluate your overall satisfaction.
Card cards also expire to help protect against identity fraud. To process electronic transactions, you need the credit card number and expiration date. If fraudsters are able to gain access to your name and credit card number, they cannot counterfeit a credit card without having a valid expiration date. Under the federal Fair and Accurate Credit Transactions Act, merchants cannot reveal your credit card expiration date on a receipt.
Jeannine Mancini, a Florida native, has been writing business and personal finance articles since 2003. Her articles have been published in the Florida Today and Orlando Sentinel. She earned a Bachelor of Science in Interdisciplinary Studies from the University of Central Florida.