Why Credit Cards Have Expiry Date and CVV Code

May 13, 2025 By: Nisha Chawla

In today’s digital world, credit cards are not just plastic cards used for shopping or bill payments—they are essential financial tools. But have you ever looked closely at your credit card and wondered what all those numbers and dates mean? The 16-digit number, the expiry date, and the three-digit CVV code are not just random things—they all have a purpose.

Let us explain how credit cards are designed, why expiry dates are given, and what the CVV code does.

What Do the 16 Digits on a Credit Card Mean?

The long number printed on the front of your credit card is more than just an ID. It follows a set format, and each part tells something specific. These 16 digits are divided into three main parts:

1. Issuer Identification Number (IIN) or Bank Identification Number (BIN)

The first 6 to 8 digits represent the bank or financial institution that issued the card. For example, if your card is from HDFC Bank, SBI, ICICI, or Axis Bank, this number will be unique for that bank. This helps recognise which bank gave the card.

2. Account Number

The next set of numbers is unique to you. It connects the card to your personal credit card account. Every credit card holder gets a different account number. This number ensures that any card transaction reaches the correct account.

3. Check Digit

The last Digit is known as the check digit. It uses a special mathematical formula (like the Luhn algorithm) to verify if the card number is valid. This helps in blocking fake or incorrect card numbers.

Why Is There an Expiry Date on Credit Cards?

Every credit card has a date mentioned in MM/YY format. This shows till when the card is valid. After this date, the card becomes invalid, and the bank automatically sends a new one. But why do cards expire?

Here Are the Two Big Reasons:

1. Security Upgrade:
2. As technology grows, fraud and hacking also increase. So banks issue new cards every few years with better security features like EMV chips or contactless payments. The expiry date ensures that older, less secure cards are replaced.
3. Wear and Tear:
4. The magnetic strip or chip on the card gets damaged after years of use. This can make the card stop working in swiping machines or ATMs. So, expiry ensures that users always have a card in working condition.

Even if your card is in good shape, banks follow this expiry system to maintain a card update cycle and keep user data secure.

What Is the CVV Code and Why Is It Important?

There’s a three-digit or four-digit code on the back of your credit card, depending on the card type (Visa/MasterCard has 3 digits, American Express has 4). This is called the CVV—Card Verification Value.

What Does the CVV Do?

• Online Transaction Check:
• CVV proves that the person making the online payment physically has the card. Even if someone knows your card number and expiry date, they cannot complete the transaction without the CVV.
• Not Stored Anywhere:
• The CVV is not stored in your card’s magnetic strip or chip. Also, most websites do not store CVV to prevent misuse. So, even if your card data is stolen online, CVV acts as a safety wall.
• Extra Layer of Safety:
• CVV is like a second password, helping to stop fraud. That’s why payment gateways always ask for it when you shop online.

What Happens When Your Card Expires?

When your credit card expires, your bank usually sends a new card to your registered address. The account number and billing cycle mostly remain the same. Only the card number or expiry may change for security reasons.

Here’s what to do:

• Activate the new card and destroy the old one properly.
• Update your card details on websites where you have saved the old card for auto-payments.
• Inform apps or services like OTT platforms, food delivery, or utility billers to avoid payment failures.

Does Expiry Date or CVV Change After Renewal?

Yes. When the bank issues a new credit card, it usually comes with a new expiry date and CVV code. This is done to further protect your card from being misused, especially if the old one was compromised.

For example:

• If your old card expired on 03/25 and had a CVV of 456, the new one might have 06/30 and 892.
• Your card number may or may not change, depending on the bank.

This refreshes your card’s security and helps protect against past data leaks or breaches.

Things to Remember for Credit Card Safety

• Never share your CVV, PIN, or OTP with anyone.
• Always use trusted websites for online shopping.
• Check your credit card statement every month for unknown charges.
• If your card is lost or stolen, report it immediately to block it.
• Use mobile banking apps to freeze or limit card usage instantly.

Why Understanding These Details Matters

Knowing what each part of your credit card does helps you use it more wisely and safely. These numbers and codes are not just for show—they help protect your money and ensure your card works as intended.

As digital payments increase in India, credit card awareness is just as important as owning one. So next time you pay, take a second to thank these small digits that protect your financial life every day.

Source:

RBI, HDFC Bank, SBI Cards, Financial Express, Times of India

Disclaimer:

The information in this article is for educational purposes only. Credit card features, numbers, and policies may vary depending on the issuing bank. Always refer to your bank’s official communication for exact details.