The card payment limit is going up again (Alamy/PA)
The card payment limit is going up again (Alamy/PA)

How to avoid blowing your budget with the new £100 contactless card limit

Could the new £100 limit on a single card transaction make it easier to lose track of your spending? Vicky Shaw takes a look.

Vicky Shaw
Friday 15 October 2021 07:53

The contactless card spending limit has more than doubled, now standing at £100. The move should help some queues go down more quickly at checkouts, as shoppers can pay with a single swipe, rather than keying in their Pin.

But for some, the chance to ‘tap and go’ more often could mean bigger debts, as they lose sight of their spending.

Here’s a look at how the contactless spending limit has shot up – and how you can stick to your budget now that the limit has increased…

How has the contactless card transaction limit increased already?

Back in 2007, contactless cards had an initial limit of just £10. This was increased to £15 in 2010, £20 in 2012, and £30 in 2015.

Last year the limit was increased to £45, with some retailers and customers being reluctant to deal with cash during the coronavirus pandemic. A Bank of England study indicated, however, found the risk of catching coronavirus from banknotes is low.

What’s changed now?

As of October 15, 2021, shoppers will now start to see retailers accepting contactless payments up to the new £100 limit. However, as many terminals need to be updated to accept the new limit, it may be a while before all retailers can introduce it.

Trade association UK Finance suggests that consumers should ask in store if they want to know whether a retailer has updated to the new limit, or follow the prompts on the card payment machine.

What if I don’t want my contactless card payment limit to be set at £100?

Some banks have said they will allow customers to set their own contactless card limit – so ask your bank if you are unsure what their policy is. For example, Lloyds Bank, Halifax and Bank of Scotland customers are being offered new card control tools in their app. Customers of Lloyds, Halifax and Bank of Scotland will be able to set their own contactless limits, of between £30 up to £95, in increments of £5.

They can also toggle contactless functionality on and off. If they turn it off completely, they will need to enter a Pin when paying by card.

Starling Bank has also said its customers will be able to select a limit of their choice between £0 and £100, in £10 increments using a new feature in its app. Customers will also be able to turn off contactless payments entirely by setting the limit at £0, Starling says.

What about fraud?

The Financial Conduct Authority says available figures suggest there has been no significant increase in contactless payment related fraud since the limit was increased to £45 in 2020, and it will continue to keep a close eye on the data.

UK Finance says that if someone loses their card, or thinks it might have been stolen, they should contact their bank straight away. It says customers are protected against fraud, so they should not be left out of pocket if someone else makes an unauthorised transaction using their card. If people notice any suspect activity on their account, they should tell their bank immediately.

Card machines usually get an approval from the bank before they take a contactless card payment. So if someone has reported their card as lost or stolen, it should not work. Cards also have security checks so that from time to time you do have to enter your Pin.

Could I end up paying for someone else’s shopping by accident?

UK Finance says contactless cards only work when they are just a few centimetres from the card machine, so there’s no chance someone could accidentally pay for someone else’s shopping just by walking past them at the till.

Could I accidentally pay for my shopping twice if I have a couple of contactless cards?

UK Finance says card machines can only transact with one card at a time.

How else can shoppers stop themselves becoming too ‘tap happy’ and overspending?

Sarah Coles from Hargreaves Lansdown says we’ve often tended to associate contactless with low value transactions, “so we don’t give it as much thought”.

“This is compounded if we choose not to take a receipt, which means we have no record of what we’ve spent, so it’s even harder to keep track,” she adds.

As well as perhaps setting your own contactless limit with your bank, Lansdown suggests: “If you’re worried you’re overspending, or money is tight, it can be a good idea to withdraw the cash you have available to spend, and then leave the card at home, so you’re not tempted to bust the budget.

“It’s also a good idea to track your spending. If you have your banking app on your phone, it makes it much easier to spend a couple of minutes at the end of the day scrolling through your account, so you have an idea of what you’ve spent, and whether you risk going over budget.”

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