Credit Card Expiry: This carelessness could prove costly! A minor mistake could cost you everything from your CIBIL score to your rewards..

The credit card in your wallet isn't just a means of spending; it's part of your entire credit history. However, this credit card also has an expiry date. But we often overlook this expiry date. We assume that when the card expires, the bank will automatically send a new one. This is true in most cases, but not always.

If the new card doesn't arrive for some reason and the old card expires and is closed, the loss isn't small; it can significantly impact your entire CIBIL score and financial image. Here are four major losses caused by this (Major Losses After Credit Card Expiry).

1. CIBIL Score Crash – The Biggest Loss

Your CIBIL score also depends on the age of your credit history. If your oldest card is closed, your old credit history is erased.

Example: If the expiring card was your oldest credit card and it gets closed, your 10-15 years of credit history is instantly reduced to zero. In CIBIL's eyes, you become a 'new' borrower, which could cause your score to drop by 50 to 100 points.

2. Credit Limit Decreases, CUR (Credit Utilization Ratio) Increases
An important component of your CIBIL score is your CUR – the percentage of your total credit limit you are using.

Example: If you have three cards, a total limit of ₹3 lakh, and spend ₹60,000, your CUR is 20% (which is good). However, if your old card with a limit of ₹1 lakh expires and gets closed, your total limit is reduced to ₹2 lakh, but your spending is still ₹60,000, your CUR will now increase to 30%. An increased CUR will further lower your score.

3. Auto-Payment and Subscription Failures
Auto-payment services like Netflix, Amazon Prime, Spotify, electricity, or mobile bills are running on the old card. As soon as the card expires, all transactions will fail. This will result in the service being discontinued and may result in late fees or penalties.

4. Losing Old Rewards and Benefits
Many old cards offer exclusive benefits that new cards don't offer, such as lifetime-free status or better rewards on specific categories. If the card is closed, these benefits are lost forever.

What to Do Now – Your Action Plan Before Expiry
Check the Expiry Date: Check the date of every card in your wallet. Pay attention to those that are about to expire in the next 3-4 months.

Update Address and Phone Number: Check your bank's app or website to see if your details are updated.

Be proactive: If the new card hasn't arrived 20-25 days before it expires, call the bank yourself.

Activate the new card as soon as you receive it: Set a PIN and start using it.

Update all Auto-Pay links: Replace the old card with the new card details to prevent payment failures.

Disclaimer: This content has been sourced and edited from News 18 hindi. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.