What Are Contactless Credit Cards? And How Do I Get One?

Susan Shain

Susan Shain | Blog

Nov 29, 2018

Swipe, dip, or tap?

You might have to make the choice more frequently in the coming years.

That’s because contactless technology is expected to equip more than half of all new credit and debit card shipments by the end of the decade, reports The New York Times.

But how do these cards work? Are they safe? Here’s everything you need to know, plus our picks for the best contactless cards available.

What Are Contactless Credit Cards?

Although there’s been lots of buzz about contactless credit cards, the technology isn’t new.

Mastercard, for example, introduced contactless cards back in 2003, and the Chicago transit system adopted contactless payments in 2011. The London Tube has been using them since 2014.

Over the past decade, contactless cards have steadily grown in popularity in Canada, Europe, and Australia — and are finally gaining ground in the U.S. ABI Research, a market advisory firm, predicts that, by 2022, 2.3 billion contactless cards will be issued globally each year.

The cards use a contactless technology called NFC (near field communication). Each card has a contactless chip and radio frequency (RFID) antenna, which is why they’re sometimes called RFID credit cards or RFID chip credit cards, too.

When you’re shopping with a contactless card, you wave it over the terminal, and your card uses radio frequencies and a one-time code to complete the transaction. There’s no need to swipe, sign, or dip.

Image credit: Visa

The whole tap-and-go process takes a few seconds, making it infinitely faster than EMV chip cardsThat’s why contactless cards are perfect for speedy transactions, like in line at a coffee shop or on a city bus.

Digital credit cards or digital wallets, like Apple Pay, Google Pay (formerly Android Pay), or Samsung Pay, use the same technology as contactless credit cards for mobile payments. Before using your phone or wearable at checkout, you’ll need to download or set up the appropriate tap-and-pay service for your device.

Are Contactless Credit Cards Safe?

Though the NYT says contactless cards are “significantly more secure” than magnetic-strip cards, they still have some weaknesses you should be aware of.

The biggest issue comes in the form of RFID skimmers, who use their own NFC readers to steal details from contactless cards. This can occur on busy city streets or in crowded subways, when thieves can get close without drawing too much attention.

While there’s been much talk about this potential threat, some experts say it’s overblown. One told NPR most thieves would consider RFID skimming a waste of time, since it’s much easier to go online and buy “thousands” of credit card numbers at once.

If you’re concerned, you can purchase an RFID-blocking wallet or wrap your card in a piece of aluminum foil. 

The most important step, however, is to monitor your card’s activity like usual. The vast majority of credit cards, including tap credit cards, have a zero-liability guarantee. Just be sure to check your monthly statements and credit reports, and alert your issuer if you spot any unrecognized purchases.

Also take heart in the fact that most card issuers set limits on contactless transactions — usually around $50 to $100. After you hit that amount, you’ll need to sign for the purchase.

Which American Issuers Offer Contactless Cards?

To see if a card features contactless technology, look for a wave-like or field symbol on either the front or the back.

The American Express Gold Card (Review) features contactless technology.

The American Express® Gold Card (Review) features contactless technology.

You can also call your credit card issuer to see if contactless-enabled cards are available — sometimes banks will send an updated version if you ask.

Here are the stances of some major credit card issuers:

  • American Express says contactless is available on the “majority” of its personal cards, plus a selection of business cards.
  • Capital One offers an array of contactless credit cards (see below).
  • Chase will start sending out contactless cards in late 2018 and early 2019. You’ll receive one when applying for a new card or renewing an existing card.
  • Discover phased out its contactless cards — so if you’d like to tap to pay with Discover, you’ll need to add your card to a mobile wallet.

As for where contactless payment methods are accepted? More and more retail locations, including McDonald’s, Starbucks, Subway, Trader Joe’s, Aldi, Walgreens, and Whole Foods. Just look for the wave or field symbol on the point-of-sale terminal, or explore Mastercard’s searchable database of contactless merchants.

Don’t worry if a merchant doesn’t have a contactless payment system. Contactless cards are regular credit cards, just with more advanced technology. So you can use them anywhere your specific card’s accepted, including online or over the phone. And if you sign for the purchase, you won’t have the $50–$100 transaction limit you would when paying with a tap.

5 Best Contactless Credit Cards

Because of the low transaction limits when going contactless, tapping and going works best for small purchases at places like gas stations, grocery stores, and restaurants.

With that in mind, here are several credit cards that earn solid rewards in those categories — and that also feature contactless technology.

We're currently unable to link directly to an application for the Chase Freedom, but you can learn more here, on our advertising partner's website.

Key Features & Terms

  • Annual fee: $0
  • Introductory bonus: $150 after spending $500 in the first 3 months
  • Rewards:
    • 5% cash back on up to $1,500 of purchases in quarterly bonus categories (then 1%)
    • 1% cash back on everything else
  • Purchase and Balance Transfer APR: 0% for 15 months, then 16.99%–25.74% Variable

Each quarter, the Chase Freedom offers several categories in which you can get a whopping 5% cash back; grocery stores, drug stores, and gas stations make frequent appearances.

A similar card is the Chase Freedom Unlimited (Review), which offers a flat 1.5% cash back on all your purchases. If you don’t want to fuss with different categories, this card’s probably a better fit for you.

If you apply for either of these cards (or both), follow up with Chase to ensure the cards will be contactless, as the technology is only rolling out in late 2018.

 

Key Features & Terms

  • Annual fee: $0
  • Introductory bonus: $150 after spending $500 in the first 3 months
  • Rewards: 1.5% cash back on all purchases
  • Perks: No foreign transaction fees
  • Purchase and Balance Transfer APR: 0% for 15 months, then 18.74%, 23.74%, or 27.74% Variable

Like the Chase Freedom Unlimited, this card offers 1.5% cash back on every purchase, every day. Unlike the Freedom Unlimited, however, it doesn’t charge foreign transaction fees, making it a good choice for international travel.

 

We're currently unable to link directly to an application for the Capital One® SavorOne℠ Cash Rewards Credit Card, but you can learn more here, on our advertising partner's website.

Key Features & Terms

  • Annual fee: $0
  • Introductory bonus: $150 after spending $500 in the first 3 months
  • Rewards: 
    • 3% cash back on dining and entertainment
    • 2% cash back at grocery stores
    • 1% cash back on everything else
  • Perks: No foreign transaction fees
  • Purchase and Balance Transfer APR: 0% for 15 Months, then 14.74%, 22.74% or 26.74% Variable

With this foodie-focused card you’ll get a generous amount of cash back on your restaurant bills, although the rate for groceries is not as competitive (but these expenses are perfect for contactless transactions!).

 

Key Features & Terms

  • Annual fee: $0
  • Introductory bonus: $150 after spending $1,000 in the first 3 months
  • Rewards: 
    • 3% cash back at U.S. supermarkets (on up to $6,000 per year, then 1%)
    • 2% cash back at U.S. gas stations and select U.S. department stores
    • 1% cash back on everything else
  • Purchase and Balance Transfer APR: 0% for 15 months, then 14.99%–25.99% Variable

This card hits on the right contactless categories: U.S. supermarkets and U.S. gas stations, although you’re limited to U.S. merchants. An upgraded offering is the Blue Cash Preferred® Card from American Express® (Review), which has an annual fee of $95 — but earns 6% cash back at U.S. supermarkets (on up to $6,000 per year, then 1%) and 3% at U.S. gas stations and select U.S. department stores. So, depending on how much you spend in those categories, the rewards might offset the annual fee.

 

Key Features & Terms

  • Annual fee: $250
  • Introductory bonus: 25,000 Membership Rewards points after spending $2,000 in the first 3 months
  • Rewards: 
    • 4X Membership Rewards points per dollar at U.S restaurants
    • 4X points at U.S. supermarkets (on up to $25,000 in spending per year, then 1X)
    • 3X points on flights booked directly through airlines or amextravel.com
  • Perks: $120 annual dining credit at select restaurants ($10 per month), $100 annual airline fee credit, no foreign transaction fees
  • Purchase and Balance Transfer APR: N/A (it’s a charge card and must be paid in full each month)

With strong rewards at U.S. restaurants, U.S. supermarkets, and flights, as well as several perks, this card is a good choice for travelers. You’ll also get 20% back on restaurant bills (up to $100) if you sign up before 1/19/19.

Are Contactless Cards the Future?

The last time contactless cards entered the American market, they didn’t make much of a splash.

But this time — with more and more merchants hopping on board, and more consumers embracing digital payment methods — we’d guess they’re going to stick around.

So get ready to tap, pay, and head off on your merry way.

Ready to find the perfect new credit card, contactless or not? Check out our picks for the Best Credit Cards in a variety of categories.
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