Contactless Credit Cards: What You Need to Know

Be honest, the last time you were in the grocery store, did you feel just a little leery about touching the payment terminal? You know, the one that everyone else before you had their fingers on too?

If so, you're not alone. People are finding smart ways to adapt to the novel coronavirus pandemic, and one of those ways is contactless credit cards. They're so popular, in fact, that Visa recently announced that the use of contactless credit cards in the U.S. is up by 150% from March 2019 to March 2020. 

We're not here to fearmonger, and so it's important to let you know that the Centers for Disease Control and Prevention say there's very little evidence you can catch the coronavirus from touching hard surfaces. Still, they recommend playing it safe. And besides, contactless credit cards have an added bonus: They're quicker to process, allowing you to sail through the line and get on with your day even faster. 

Curious about how these nifty little rectangles of technology work, and how they can help you? Read on. 

What is a contactless credit card?

Contactless credit cards are also known as "tap-to-pay credit cards," or "tap-and-go credit cards."

How does contactless technology work?

They use a technology called Near Field Communication (NFC). It works like this: When you're ready to pay, you hover or tap the card just above the reader. The card itself has a chip and a tiny antenna inside of it, which it uses to send your credit card number and a one-time-use code over that small gap to the reader. 

This code identifies and verifies the transaction. That means the card doesn't need to send your name, billing address, or the three-digit code on the back. In this way, it's actually safer than more traditional credit card purchases, such as those done online, as it's harder for thieves to get hold of your personal information. 

How do I know if my credit card is contactless?

If you're not sure whether you have a contactless credit card, there are two ways you can find out:

• Ask your card issuer, or
• Look at the card itself

If it's a contactless credit card, it'll have a wave symbol printed somewhere on it. This logo looks a bit like a Wi-Fi symbol rotated on its side.

Where can I use a contactless credit card?

The merchant will need a contactless credit card reader to accept your payment. You can tell whether a reader accepts contactless cards or not because it'll have the same wave logo printed prominently on the machine. 

Americans aren't using tap-and-go payments as much as people in Europe, where it's been widespread for years. Contactless readers have actually been the big sticking point as many U.S. merchants just haven't been upgrading their equipment. But coronavirus concerns make it likely we'll see this rolled out more in the upcoming months. 

If you're worried about running into a reader that doesn't accept contactless credit cards, there's no need. You can still use your card the old-fashioned way -- by swiping, dipping, or even entering in the information manually.

Is a contactless credit card right for me?

It certainly doesn't hurt to get a contactless credit card. Even if you never use it, at least you have the option. 

The only thing to watch out for is that you don't let your card's contactless capabilities lull you into a false sense of security. You still need to keep an eye on your card so you can flag any unauthorized charges. And if you ever do lose your card, it's even more important to make sure you report it ASAP so your issuer can deactivate the card. 

But on the whole, contactless credit cards will likely follow hot on the heels of EMV-chips as the next big credit card technology. In this case, contactless credit cards are literally the wave of the future.

Which credit card issuers offer contactless credit cards?

Virtually all of the major credit card issuers offer some sort of contactless credit cards, especially for their more popular cards. Most of American Express's cards are available in contactless forms, for example, and Chase offers 22 contactless card options. It may be a bit hit-or-miss with smaller card issuers, such as credit unions or smaller banks. 

If you want a tap-to-pay credit card, you can always contact your card issuer to ask if it offers a contactless version of your card. Some of the major card issuers, such as Chase, even allow you to make this inquiry online. 

What do I need to know before I get a contactless credit card?

Contactless credit cards are generally considered safer, both from a biological and a fraud perspective. Still, like any technology, they're not foolproof, and they do introduce new fraud risks you need to be aware of. 

What happens if my card is stolen?

The biggest new threat is that someone physically steals your card. All they need to do to buy something is to tap the card. They don't need to sign anything, and they don't need to provide any ID. Losing your card or having a thief (or, alternately, a cash-poor teenager in your household) physically steal it to use in-person isn't as high on the scale of risk as some other threats, but it is something to be aware of. 

Should I be concerned about radio frequency identification readers?

In addition, it is possible for thieves walking nearby to scan your card with a radio frequency identification reader (similar to the one that you'd use at a cash register to pay) and collect your information that way. But as we've already discussed, without your other information -- name, zip code, and the three-digit code on the back -- it's mostly useless. 

What about other forms of credit card fraud?

Thieves can still get that information in other ways, but they'd have to be more tenacious than your average bear (and they could be). And if they do get that other information as well, you're still vulnerable to identity fraud if someone impersonates you to claim a false tax refund or open a credit card in your name, for example. 

Rest assured that even if someone does commit fraud with your credit card, contactless cards have the same protections as regular cards. Most credit card companies offer fraud liability guarantees as long as you notify them of any fraudulent charges within a reasonable time frame.

Still have questions?

Here are some other questions we've answered:

• What Is a Virtual Credit Card?
• What to Do if You Lose Your Credit Card
• Cash vs. Credit Card: Which Is the Better Way to Pay?