Maybe it's just at our house, but our towels start to fray along the edges well before the actual terrycloth is worn out. I trim the strings off, zig zag the edge in matching thread, and then fold it over just a quarter-inch to stitch it down. Makes a new edge and the towel keeps going.
Currently most of our bath towels are wedding presents from 22 years ago. . . and counting!
Then there was this washcloth that turned up with a frayed corner. It looks like a dog chewed on it, but that's puzzling since we don't have a dog. So I cut off the top strip entirely and stitched down the flat part to make a new edge. Let's see if that one can go 22 years, too.