In the era of lockdowns and social distancing, you’re probably relying most heavily on your credit card, as you shop online for many of your purchases.
But you might run into a snag and not be able to complete your transaction if you’re trying to use your card after its expiration date.
Here are some things to keep in mind if you want to keep those purchases coming all year long.
See related: How do credit cards work?
Wear and tear
While your credit card account itself doesn’t expire at a certain time, the piece of plastic associated with it does.
That’s because “magnetic stripes wear out, cards bend,” says Nessa Feddis, a senior vice president at the American Bankers Association.
Because of their propensity to show wear and tear, “issuers want to make sure to get working cards into customers’ hands,” says Ted Rossman, industry analyst for CreditCards.com.
Cards with magnetic stripes typically wear out faster, so they usually expire after three years, Rossman says.
EMV cards, which contain computer chips embedded in them, tend to show less wear than those with magnetic stripes, Rossman says. As a result, many issuers are extending the expiration date on those cards to five years.
Sending you a new card periodically also allows issuers to implement design upgrades and technology updates, according to a spokeswoman for Discover.
Credit cards for retailers such as Macy’s can be an exception and there may be no expiration date on such cards.
Safety and security
Expiration dates also serve as a security measure. If you’re making a purchase online or by phone, you’ll typically be asked to provide your account number, the three- or four-digit security code on the card and the credit card expiration date.
The expiration date helps to verify that your transaction is valid, Feddis says. “It’s another data point to match up.”
For the card issuer, putting an expiration on a credit card helps the company manage its credit card portfolio, Rossman says. About 20% to 30% of credit cards that are issued are never activated.
Having an expiration date on a card serves as a “mechanism for re-evaluating a customer’s standing and potentially clearing dormant cards off the books,” Rossman says.
According to the American Bankers Association, Americans held 373 million credit card accounts in the second quarter of 2020. But that was down from 374 million in the second quarter of 2019. It was the first time the number of accounts has fallen since 2012, no doubt tied to the COVID-19 pandemic.
Meanwhile, credit card debt fell by $74 billion from the third quarter of 2019 to the third quarter of 2020, according to the New York Federal Reserve. The drop was driven by the economic recession caused by the pandemic.
See related: Many Americans say they’ll spend less after the pandemic than before
Where to look
If you want to check your credit card’s expiration date, you’ll often find it embossed on the front of your card, under your account number and above your name.
It will be embossed with the two-digit month and two-digit year, such as 02/21.
In the past, the raised numbers were needed on the front of a credit card because merchants would use a machine to make an imprint of the numbers on a receipt, and customers would have to sign the receipt. Now those machines are few and far between.
Today you may have a newer chip credit card that has no raised numbers on the front, and the account number is printed on the back.
With those cards, you’ll also find the expiration date on the back of the card, below your account number.
The expiration date is listed as a month and year, so your card is valid through the last day of that month, the Discover spokeswoman says.
Your new card should be sent to you well in advance of the expiration date. Once the new card arrives, be sure to activate it using your computer or by calling in to the number listed on the sticker placed on your card. Sign your card and be sure to destroy your old one.
See related: What do the numbers on your credit card mean?
If you use your credit card to make recurring payments, you’ll need to update your card information with the merchant to make sure your payments continue to go through, the Discover spokeswoman says.
However, many merchants subscribe to credit card issuers’ account updater services. If you get a credit card with a new expiration date, or you receive a card with a new account number, the service updates that information to the merchant, so your credit card payment will continue to be processed.
If your account information doesn’t automatically update, you may receive an email from the merchant, asking you to go to the company’s website and update your information.
Paying attention to your credit card expiration date can help keep your transactions on track throughout the year.
Do you know a family member or trusted friend who is struggling with a low credit score? Maybe your college-student children don’t have enough credit to even have a score. You can help these friends or family members by adding them as authorized users on your Capital One credit card. Plus, you might earn some extra rewards for yourself along the way.
Just be careful. You as the primary cardholder are responsible for any debt authorized users added to your Capital One card. If they run up too much debt each month and don’t pay you? You’ll have to foot the bill. It’s why you should only add authorized users whom you trust.
Adding an authorized user to a Capital One card
- What is an authorized user?
- Authorized user eligibility requirements
- How to add an authorized user to your Capital One account
- Pros and cons of adding an authorized user
What is an authorized user?
An authorized user can use your credit card to make purchases. When you add a user to your Capital One credit card, this user receives their own card in the mail – which they can then use to make purchases, both online and in-person.
The charges that authorized users make are added to your credit card bill just like yours. When the bill comes due, though, you are responsible for paying off these charges as the primary cardholder. It’s important, then, to reach an agreement with any authorized users before you add them to your account; set limits on how much these users can spend each month and a date when users must pay you for the charges they’ve made.
If authorized users don’t follow your rules? You can remove them from your Capital One account whenever you’d like. You also have the option of temporarily freezing their card so that they can’t use it.
So with the risk that additional users might abuse your credit, why would you ever add an authorized user? There’s one main reason: to provide family members or friends with a bit of financial help.
If you use your Capital One card responsibly, you’ll give your authorized users a steady credit boost. Every time you make an on-time credit card payment, it will be reported to the national credit bureaus of Experian, Equifax and TransUnion not only in your name, but in the names of your authorized users as well.
And for those authorized users who haven’t yet built a credit score, these regular reports to the bureaus can help them establish enough credit to finally generate one. That’s why parents often add their children as authorized users: It’s a way for parents to help their children build or improve their own credit scores.
There is one other benefit for primary cardholders, too. If you have a Capital One card that generates rewards, like the Capital One Venture Rewards Credit Card, you’ll earn miles for every purchase your authorized users make. This can help you earn rewards at a faster pace.
See related: Cards that reward you for adding an authorized user
Authorized user eligibility requirements
You can add as many authorized users as you’d like to your Capital One account. And these authorized users don’t have to be related to you. You can add your spouse, children or other family members, of course, but you can also add friends or employees to your account.
You don’t even have to provide much information to add authorized users. Capital One asks just for the names, phone numbers, Social Security numbers and dates of birth of authorized users. Of course, you’ll have to provide an address so that Capital One can send these users their own credit card.
How to add an authorized user to your Capital One account
Adding an authorized user to your Capital One account is a simple process.
- Log onto your account
- Click “Services”
- Select “Manage Authorized Users”
- Then click “Add New User”
When adding a user, you’ll have to provide Capital One with that user’s name, birth date and SSN.
Fee for adding an authorized user
Capital One charges no fees for adding an authorized user. You can add as many authorized users as you’d like.
Managing authorized user access
You have limited control over authorized users with a Capital One credit card. You can’t set spending limits for your authorized users, so they can spend as much as they’d like. But if authorized users do spend too much, you have the option of instantly locking their card. This will prevent them from using the card until you unlock it.
If authorized users aren’t following the spending and payback rules you’ve created, you can also remove them from your account. You can do this by logging onto your account, clicking “Services” and selecting “Manage Authorized Users.” Click on the name of the user whom you’d like to remove and check the “remove user” option.
Capital One says that authorized users receive their own card number. This way, you can track exactly how much they spend. Additionally, authorized users won’t be allowed to cash in your rewards points.
Pros and cons of adding an authorized user
Adding an authorized user comes with both risks and rewards. Most of the rewards, though, go to authorized users, while most of the risk falls to primary cardholders.
- Credit boost: When you add an authorized user, you’ll provide a boost to that user’s credit score. Whenever your on-time credit card payments and account history are reported to the credit bureaus, your users will also receive a bump to their score.
- Building a credit score from scratch: You’ll also help authorized users build credit scores if they don’t have one. This is why many parents add their children as authorized users. These children might not have borrowed money to buy a car or be making regular payments on their own credit cards. Because of this, they don’t have enough of a credit history to generate a credit score. Adding them as authorized users will give them that needed credit history.
- Generate more rewards points: Whenever an authorized user makes a purchase with your card, that purchase will generate rewards points or cash-back bonuses if you have a rewards card. This can help you build points and earn cash back at a quicker pace.
- Too many charges: You can’t set a spending limit on your Capital One authorized users. There’s nothing stopping them, then, from charging as much as they’d like each month, even if you’ve agreed on specific spending limits. You’re on the hook for any purchases authorized users make, so a reckless user can damage your budget.
- Potential credit score hit: If you pay your credit card bill 30 days or more late, this late payment will be reported to credit bureaus. This will hurt your credit score, but it will also cause the scores of your authorized users to drop.
- Higher credit-utilization ratio: Using less of your available credit is better for your credit score. If you use too much of your available credit, your credit score will fall. If your authorized users run up too many purchases each month, it could increase your credit utilization ratio, which could hurt your credit score.
- Interest charges: If you don’t carry a balance each month on your credit cards, you won’t have to worry about paying interest. But if you do, you will. If your authorized users charge so much that you can’t pay off your bill in full each month, you’ll be hit with high interest charges.
Should you add an authorized user to your Capital One card?
Adding authorized users to your credit card can help family members and friends who need a boost to their credit scores. The risk to you, though, is high. Only add authorized users whom you trust. And before you add any, make sure you and the authorized users have an agreement on how much they can spend and when they must pay you for the purchases they make.
And if your authorized users aren’t abiding by these rules? Don’t hesitate to turn off their Capital One cards. If you need further protection, you can contact Capital One to remove any authorized users who refuse to follow your spending rules.