I never did in my entire lifetime of using credit cards and never had any problems arising from it.

no point ler.. got some people scrap it our also.. but its embedded so can still see whn u slant the card abit

Yes, I did use my existing cc to apply for another cc. Rarely they will ask for the reverse side of the cc and even if they do, either the agent or myself will cross out the 3 digit code. Got to be extra careful doing the cancellation coz sometimes the carbon still stands out and you can see the number if you look at the paper from an angle. I cross it out till the paper nearly worn out, that way definately no trace of the number anymore.