When Your Credit Card Expires

Whatever company credit card – Visa or MasterCard – you have there in your purse, there is one common feature with each of them. It is the expiration date. Every cardholder is sure to know what it is, but not many actually realize what purposes it serves. If we go into the details about the expiration date, we can learn many interesting peculiarities about it.

First, let’s identify the reasons for banks and credit card companies to include the expiration date into your plastic. With every different credit card issuer, you find a different reason but the main one remains with all of them. It is the protection from fraud and the lifespan of the magnetic strip with the date itself on your credit card.

These reasons have always been the basic ones but today, with the designing of virtual credit cards and the practice of online financial and credit card transactions, the lifespan and credit card and ID fraud protection have become less significant for preserving the magnetic strip and expiration date on it.

Citing the vice president of communications for the American Financial Services Association, the credit card expiration date is losing its importance for fraud prevention because most credit card transactions are carried out online these days and it’s only the credit card number that’s needed.

But as things still are, lots of operations are conducted manually and for offline credit cardholders the expiration date still matters.

As to the lifespan of your credit card, the magnetic strip disintegrates in about four years, it being determined by the particular credit card company. That’s what adds special value to your expiration date. Once your credit card expires, the information on your magnetic strip is updated and even if your credit card information is stored somewhere, it doesn’t present any value to ID thieves and credit card fraudsters.

Now, what does the expiration date lead to? As it determines the shelf-life of your credit card, it gives additional pretext for your creditor to keep contact with you and send you new credit cards in replacement of the old ones as well as unasked-for credit card offers.

That’s why you should keep on the alert. Issuing banks and credit card companies use the current information on your card to market their products more effectively. And very often these credit card products are not actually designed for your particular credit card history and credit score but are so enticing that you cannot resist accepting the offer.

However, if you card is approaching the expiration date, the card issuer has the legal right to send you a replacement. Watch out here! Banks and issuers usually send you new credit card a month before the expiration and you commonly find it in your mailbox. But the terms and conditions on your new offer very often appear to be quite different from your old plastic!

If you scrutinize the fine print, you are sure to find significant changes with the APR, annual fees, due monthly payment date and the billing cycle.

As a rightful cardholder, you can refuse from the new credit card, if you do not like the terms of the contract but you are supposed to notify the provider in writing. The creditors’ aim is to impose terms of advantage to themselves, your concern is to make a credit card deal most suitable for your current credit rating and lifestyle on the whole.

Well, if the new credit card offer meets your requirements and financial capabilities, activate it but do not forget to close the old one.

And one more thing to consider. The expiration date approaching gives you a fine chance to negotiate with your creditor better terms. If you are a valued, creditworthy customer and you’re sure that your provider will be sorry to lose you, you can always ask for an interest rate reduction.