If your auto-renewal is on and the credit card on the database is expired, your account will be renewed and that invalid credit card will be charged. It won't work, obviously. Your account will continue being GOLD (because it renewed) and Microsoft will try to charge that credit 2 more times in the next two months (a total of 3 Months of "free live" and 3 tries to charge you for the new block of gold time, one each month).
After the third time is denied, since the card is invalid, your account will be suspended because you didn't pay for the service (the automatic renewed GOLD account which you didn't really ask for). From that point on, I've been told it's very hard to get your account back. To prevent this, either turn auto-renewal off or, if you're already screwed and are in the 3 month "we're trying to charge you but you're not paying us" period, you NEED to add a new Credit Card to the system prior to the third charge. Calling support won't get you anywhere.
Maybe it changed by now, but that's what used to happen one year ago.