Millions of credit card holders in the country depend on credit cards for day-to-day transactions and financial flexibility. Still, they sometimes overlook the significance of their card’s expiry. Acknowledging what card expiry means and the implications of the same for individual finances is extremely important for everyday credit card users.
It is not only about the basic concept of expiry on credit cards. It is equally important to understand the importance of credit card CVV, PINs, and ATM details to keep your finances safe from misuse and fraud. In this write-up, let us hence understand what card expiry is and why banks introduce such cards.
Why do credit cards carry expiry dates?
The credit card expiry simply refers to the date beyond which the physical card becomes invalid for carrying out any digital or physical transactions. Even if the credit account continues to remain active. The expiry date is usually embossed on the front of the credit card in MM/YY format. It signals to the users the time by which the respective card issuer will provide a new replacement card.
Financial institutions usually replace cards consistently to:
- Enhance security features, boost their digital mechanisms, and update technology.
- Prevent potential financial crimes and fraud from older cards.
- Replace worn-out, old, damaged, and outdated credit cards.
- Review, recheck, and update cardholder accounts on a regular basis.
- To continue competing with peers to maintain market share and leadership.
Impact on payments and accounts
When a credit card’s expiry date is passed, i.e., it expires, the associated recurring payments, such as OTT subscriptions, utility bills, health insurance, or car insurance premiums, may fail unless the new card details are updated.
That is why, to ensure seamless financial continuity, banking institutions generally dispatch new credit cards about 30 to 45 days before expiry. The new credit cards contain updated information, security codes, and often even a new card number to help users comfortably switch to using them without any disruption to their financial services.
Card expiry and credit score
Given that credit card expiry never impacts credit scores or creditworthiness directly. Still, disruption of automatic payments due to outdated details or expired credit cards can result in missing due dates of bills. Such a situation can easily hurt the credit history of an individual over time. Due to the same, it becomes essential for credit card users to promptly update their credit card bill payment information across platforms to safeguard their credit integrity and financial standing.
Growing usage and user awareness
Recent data indicate that active credit cards in the nation have doubled over the last five years. The total transaction value has also tripled over the past half a decade. Hence, with rapidly evolving technology and surging usage, cardholders should responsibly set reminders for upcoming expiry, confirm mailing addresses with banking institutions, and securely dispose of old credit cards.
In conclusion, to ensure safe disposal of credit cards, users should definitely cut through the chip and magnetic stripe. Following these simple guidelines can help keep the credit card users safe and their card usage experience pleasant.
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Disclaimer: Mint has a tie-up with fintechs for providing credit; you will need to share your information if you apply. These tie-ups do not influence our editorial content. This article only intends to educate and spread awareness about credit needs like loans, credit cards, and credit scores. Mint does not promote or encourage taking credit, as it comes with a set of risks, such as high interest rates, hidden charges, etc. We advise investors to discuss with certified experts before taking any credit.
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