Why do credit cards expire? -- Page 2

And the Truth in Lending Act has allowed those kinds of changes for "a very long time," says Jean Ann Fox, director of consumer protection for the Consumer Federation of America. What you should know: Issuers can change any material terms on your card contract with 15 days warning, says Fox.

What about debit cards?
Many banks also use expiration dates on their debit cards, citing fraud protection as the reason.

"With our check cards, which are Visa check cards, Visa requires us to have expiration dates as a security measure," says Mary Beth Navarro, communications manager for retail banking for Wachovia Corp.

The extra bit of information is meant to verify identity if the consumer uses the card online or by phone.

Wachovia also puts dates on its own ATM cards, Navarro says. "The reason we leave them on ATM cards is we don't want to confuse customers, where they have expiration dates on some of their cards and not on others," she says.

And, as with credit cards, banks want current information so that they can market their products more effectively, says Manning. "It's an easy way of collecting information on the account," he says. "The key is to cross-market a lot of these products they have."

Time's (almost) up?
So what do you do if your plastic is nearing its expiration date?

First off, start watching the mailbox. Banks and issuers will typically send out the new card the month before or the beginning of the month during which your current plastic expires, says Staten. It can vary, though, so if you have any questions, call the issuing bank.

This could cause problems if you are traveling or otherwise unavailable when your old card expires. Before you hop on that plane, check the dates on your plastic. If your card's nearly up, either arrange for them to overnight a new one or take another piece of plastic.

Another thing to check with a new card: terms. In an age of multiple bank mergers, new plastic often signals new terms on your account. So grab that magnifying glass and read the contract thoroughly. What's the APR? What's the billing cycle and due date? What are the circumstances that could trigger a late charge or bad mark on your credit?

And if you don't like the terms of the new contract, don't use the card. Cut it up and notify the company in writing. Many will let you pay off your balance under the old terms as long as you don't use the card again.

You might also want to take a look at how much time they've given you before the new card expires, says Manning.

"They may have a profile of this person as someone who's moving a lot or have something in the account information where they are labeled a higher risk," he says. "If I get an account that has an expiration date of less than four years, I would call up and find out what they've done to label me."

While the bank might not reveal "the nitty gritty, they should be able to tell you why it's two years rather than four," he says.

If you activate the card, be careful what information you release. Assume any phone numbers or e-mail addresses will be used for marketing. "Most people don't think that way," says Manning.

"Don't use the telephone number you use for your personal calls," he says. Give them the same e-mail address you use in situations where you expect spam, he says. "Don't let them clog up your system."

And cut up the old card once you've activated the new one.

So is an upcoming expiration date a good time to talk terms with your card company?

"It's always a good time to renegotiate," says Staten. "If you think you're in a position where you think the issuer would be sorry to see you go, you can always call and bargain for a better rate."

Dana Dratch is a freelance writer based in Atlanta.