What happens when your credit card expires?

Why do credit cards expire
Every credit card has an expiry date on the front of the card in month and year format. It serves several purposes. It helps banks to replace existing cards before they wear out and are no longer usable, and is also a security measure that is employed for validating transactions. Merchants typically ask for expiry date along with your card number and CVV for verification. Interestingly, expiry doesn't mean account closing — it's simply a condition on the plastic card.

What happens when your card expires
If a credit card has expired, it will not work for both offline and online payments. Banks normally replace it with a new one having a new number, CVV, and expiry date some weeks before the old one expires. It is an automatic procedure if your account is okay. If the card does not come, then contact the bank so that the transactions are affected.

Impact on recurring payments and subscription
The very first impact of card expiry is experienced on periodic payments such as OTT subscription, insurance premium, or auto deduction of utility bills. Since your expired card details will not be operational, these payments may bounce. Updating new card details in all the service providers is necessary so that there is no service halt or delay payment fees.

Does card expiration affect your credit rating?
The expiration date on your card does not influence your credit report. Your payment history, account age, and payment record are all linked to your credit account, not to the card. Even if you get a new card, nothing that alters your credit limit or past changes now. In case you do allow the account to close entirely instead of renewal, it will shorten your credit history and may lower your score.

How to make the change easy
Activated your new card and safely disposed of the old card by cutting along the chip and magnetic stripe when you receive it. Enumerate all automatic payments and notify them of your new card details. Remake any stored card details on online merchants in order to prevent declined transactions. That way, the change will be easy.

Why it's good to keep your card active
Even if you don't frequently use your credit card, having an active card is good for your credit history. Your longer account history of keeping the account open and your higher level of available credit both factor into your utilization ratio, and both are positive for your score. For this reason, it is generally better to keep the account open by taking the replacement instead of allowing the card to expire and become closed.