Why Credit Cards Expire
Yow will have noticed the two dates embossed on your credit cards: the issue date on the left hand side and the expiry date on the right. This is usually somewhere around two years after the issue date. So why does the card expire; after all he rectangle of plastic that forms the card is pretty indescructible isn't it?
Reasons for the Expiry Date
One of the main reasons for an expiry date is that the magnetic stirp on the back of the card only has a limited lifespan. It can be rubbed off the plastic card or may become demagnetized by handling. If this happens your card will no loger work in credit card terminals and ATMs.
Even the card itself is not entirely indestructible. It is liable to fatigue from being flexed in wallets or purses which will lead to the card peeling and cracking.
Credit card companies also use the expiry date as a way of re-connecting with their customers. It gives the company and the user the opportunity to get together and discuss any issues or complaints that the customer may have. It also allows the card company to appear to care about you as a customer. They will send you a friendly reminder, kindly offering you the chance to renew with your same comfortable company. With all the competition out there, comfort and history can go a long way in maintaining customers.
Credit cards are now being updated with new technologies (such as chips) and additional security devices and setting an expiry date ensures that no customer has to wait too long before they receive the latest cards.
Cardholder security is also a reason for card expiry. This allows the company to check up on you and make sure you are who you say you are and nothing has changed. With identity theft on the rise this should be considered as a good thing.
What to do when the Expiry Date Approaches
In general you will not have to do anything as your credit card's expiry date approaches. In general the new card will be supplied to you about a month before the current card is due to expire. When this arrives you may well have to contact the issuing company to activate it (more and more companies are using this as an anti-fraud measure now).
Once you have your card then check the terms it comes with to make sure that they are either the same as (or are hopefully better than) your current card. If the terms are worse contact your card issuing company straight away to find out why. After all, your are in the driving seat hear and your can always cancel your card.