There are a few reasons why banks have expiry dates on credit/debit cards.
Reason 1: With regular wear and tear, the card usage experience may not remain smooth.
With time, the magnetic bar may wear off, leaving the card unreadable by the machines.
Or the chip may fall apart, or the card numbers become illegible, so to protect the user experience, the banks keep an expiry date—three or four years from the issue date.
Reason 2: It is an important security feature.
For most transactions, you need the CVV (Card Verification Value) number and the expiry date.
This adds another data point and may prevent some unauthorised transactions, where someone has gained access only to the card number.
Reason 3: It gives the banks a ready-made opportunity to reach out to us for promotions.
While we upgrade our phones because of fancy features and peer pressure, there is hardly a reason for us to upgrade our cards unless some external force prods us to do so.
Banks know this well, and that’s why most of us have experienced receiving an upgraded card or an additional offer from the banks when the expiry date of our card is approaching.
Reason 4: Expiry dates allow banks to enhance security features.
Thanks to the ever-increasing potential of scammers, banks have to keep upgrading their security features.
This means adding things like EMV (Europay, Mastercard & Visa) chips.
Some upgrades could be related to user experience as well, e.g., contactless payment capability.
