I get needing expiration dates back when they first came out, but it seems sort of antiquated in today’s world.
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Credit card companys update the security in the credit cards all the time. It would be a mess to send every single user a new credit card everytime. And even if you would send them every few years it would be a huge mess to change them out all at the same time. And with no specific date on the card users might just ignore the new card they got by mail and still run around with old card making it unsafe.
One reason is to replace the card on a regular basis because they do get damaged over time. Also makes you update your address so they can find you.
Another reason is fraud related so that if someone compromises some database of card info from 5 years ago that the info is less useful since even if the card number changes the CVV and expiration changes.
It allows a few things:
Technology updates, give you new cards, chip and pin and Tap etc…
Fraud stuff, its a safeguard to prevent identity theft etc…
Credit itself, allows them to re-assess your credit and offer a different card, rate, limit etc… periodically.
And the last and likely most important… you never want to just offer to lend someone something open ended forever.
If you offer me a $50,000 Credit limit, and I never use it, but it just floats out there.. like 23 years later I could use it suddenly.
Banks and other lenders need to keep track of how much potentially money they’ve agreed to lend and track risks.
If they just let unused cards continue to exist for decades with no expiry it’d just create this huge unnecessary liability and risk they’re obligated to track and it’s just not worth it.
beside everything else, CC’s can still die out, its better to set a predictable and knowable expiry date than getting calls from customers furious about their CC stopped working at the middle of an holiday.
When you do a transaction with a credit card, the transaction is certified to be legitimate if the card #, name on the card, expiration date, and 3-digit code (4 on AMEX) all go through an algorithm and spit out the correct result.
Not having the expiration date on the card would make it less secure, because the result of that algorithm would be easier to calculate. This varies a bit with modern cards (EMV chips, tap-to-pay), but the rough mechanics of the process are the same.
The given answers are pretty much right on (security, age, periodic updates, etc). Also I think there is a bit of “that is how we have always done it”. The software for creating the card and the bank software has a field for expiration date and to remove it would break a lot of things. That goes for retail software as well, if they suddenly removed the date, how many websites would break due to it being a required field.
One last point, there are lots of people that would notice if the card suddenly had no expiration date and call in to find out what was up.
I have no idea how accurate this is but I remember reading somewhere that the expiration date was just a suggestion at first based on how long the mag strips would last but that the date didn’t actually mean or do anything. Then people realized that the card still worked after the date and it lead to a bunch of fraud or something so companies started actually shutting the card off at that date.
Other than security aspects, banks also like to make money. A recurring charge for a new card every 2-5 years is one of the ways to do so.
For the same reason why periodic password changes are recommended: neither the card holder nor the card issuer can be sure that the card (info) is not stolen or otherwise used for fraud. This is especially true if the card holder is not actively using the card and/or not checking the account activity in short enough intervals.
Since the likelihood of abuse approaches 1 while time approaches infinity, the easiest method to mitigate that risk for all ephemeral^1 security features is to replace them and thus reset the clock regardless of concrete evidence of abuse. If my house key is stolen I can simply change the locks; I don’t need to buy a new door or a new house. If my banking card are abused I only need a new card and not an entirely new account. If I accidentally type my Reddit password into a comment field and hit “submit” (because I didn’t notice I was already logged in and confused the log-in form with the comment submission form) then I’ll just assign a different password; no need to get a new account.
(This is one reason why many security researchers aren’t too fond of biometric properties as proof of authority since they can still be “stolen” and abused but they cannot be changed easily or at all – without maiming the carrier.)
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^1 Meaning that the feature is just some made-up pattern that we agreed is essential to prove identify, authorisation, etc. That pattern could be a piece of (secret) information or a piece of specifically shaped metal that just so happens to unlock one particular door. (I’m aware that “ephemeral” has a different meaning in the context of cryptographic protocols but that’s not what I mean here.)
I mostly covered this is a subcomment but felt like it should be direct response. The answer is 1. Card security, 2. Card supply management, and 3. Customer engagement checkpoint. Here is a decent [article that spells it more eloquently.](https://wallethub.com/edu/cc/credit-cards-expiration-date/25566#:~:text=The%20inclusion%20of%20expiration%20dates,ease%20with%20which%20criminals%20can)
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