Why Do Credit Cards Expire?

Have you ever wondered why credit cards have an expiration date? According to industry experts, there are two main reasons. The expiration date helps the industry fight fraud. And it's an opportunity to issue a new card with more security features. Let's look at both reasons why credit cards expire.

Fraud Prevention

Expiration dates help protect customers against identity theft and fraud. If you've ever used your credit card online or over the phone, you know the retailer will ask for the expiration date. Giving vendors an additional point of verification when accepting a credit card transaction online or over the phone decreases the chances of a fraudulent transaction.

As Chase Bank explains: “This requirement acts as a layer of protection because the expiration date is printed on the physical card itself. If someone attempts to make a fraudulent purchase using your credit card details without having the actual card, it may be more difficult for them to do so without access to the expiration date.”

Updating the Card

A plastic credit card seems like a low-tech item. In reality, there's a lot going on in that small piece of plastic. Today most cards have EMV chips for security and RFID (radio-frequency identification) for tap-to-pay. These features are relatively new and often find their way to consumers when an old card expires and a new one is issued.

In addition, cards wear out over time. For these reasons, an expiration date offers a simple deadline to get a new card with the latest technology.

Other Possible Reasons for an Expiration Date

Credit card industry observers claim that expiration dates serve a variety of other purposes. These include reminding you that you have credit available and giving creditors a chance to re-assess your risk. While you'll find articles online from reputable sites that make these claims, I haven't been able to substantiate them.

The good news is that you generally don’t have to do anything to get a replacement card — the credit card issuer will send out your new cards a month or so before the old one expires. This just happened for us, as our excellent Chase Freedom Unlimited® replacement cards showed up a couple of weeks ago.