Credit card expiration dates vary by provider. Often, the more common question consumers ask is "Why do credit cards expire at all given that the provider just sends me another one anyway?" Expiration dates provide a number of security and marketing advantages to the banks that issue cards.
Providers typically use expiration dates that range from two to four years. A July 2012 "MSN Money" article noted that three years is the typical time frame. If a new card is issued in February 2014, it would expire in February 2017, for instance. This period of time allows the issuer to balance customer convenience for ongoing use with the marketing and security benefits of a time limit.
One of the reasons providers have expiration dates of around three years is because cards naturally deteriorate over time, especially if you use them often. Normal wear and tear can scuff the face of the card, including the numbers. Additionally, wearing on the back can cause your signature and the three-digit card verification code to fade. The magnetic strip on the back of the card, which is vital to electronic scanning, also gets worn over time.
The single greatest reason providers use card expiration dates is fraud protection, according to the "MSN Money" article. Thieves have easier access to your card number than they do your expiration date, which they usually need for transactions. Additionally, periodically requiring that you activate a new card upon renewal ensures that the account holder is the one in actual possession of the card. If someone else has the card without your knowledge, the expiration cuts off their ability to use it indefinitely.
Credit card companies are big marketing businesses, and requiring you to activate a new card gives them a couple of major marketing opportunities. Sending you the renewal letters and card provides brand exposure, which reminds you that you have the credit in case you want to use it. Renewal letters often come with limited-time rate promotions or other bonus offers. Some providers use activation calls as a chance for add-on sales of fraud prevention services and other offerings.
- MSN Money: Why Credit Cards Have Expiration Dates
- Bankrate: Why Do Credit Cards Expire?
- Consumer Financial Protection Bureau. "Can My Credit Card Company Change the Terms of My Account?" Accessed Feb. 29, 2020.
- FollowUpThen. "How To Use." Accessed Feb. 29, 2020.
- Discover. "New Card Activation." Accessed Feb. 29, 2020.
- American Express. "Request a Replacement Card." Accessed March 1, 2020.
Neil Kokemuller has been an active business, finance and education writer and content media website developer since 2007. He has been a college marketing professor since 2004. Kokemuller has additional professional experience in marketing, retail and small business. He holds a Master of Business Administration from Iowa State University.