Contactless £100 payment limit to be lifted: why setting your own limit matters more than ever

The £100 contactless card payment limit is set to be lifted, or even removed entirely, the Financial Conduct Authority (FCA) has confirmed.

What does that mean for you?

You’ll be able to set your own contactless limit, or switch contactless off completely, putting more control in your hands.

But when spending is easier, it’s also easier to spend without realising.

What are contactless payments?

Contactless payments let you pay quickly and securely by tapping your card, phone or smartwatch on a payment reader.

They were introduced in 2007 with a £10 limit. Since then, the limit has steadily increased:

• £30 in 2015
• £45 in 2020
• £100 in 2021

Each increase has made paying quicker and more convenient for you, but it has also raised concerns about fraud, theft and overspending, especially when higher amounts can be spent with just a tap.

Why setting your own limit matters more than ever

There are already safety measures in place, like being asked for your PIN after several contactless payments.

But the most important limit is the one you set yourself.

When spending is frictionless, it’s easy to lose track. A coffee here, a lunch there, a quick shop on the way home, it all adds up faster than you think.

In fact, the FCA’s own research found 78% of people didn’t want contactless limits to change, with many worried they’d spend more without thinking.

That’s why setting your own personal limits, and sticking to them, really matters.

Here’s how you can stay in control in a contactless world.

Know what money you actually have

Start with your income. Look at how much money you take home each month after tax. This is your total pot for:

• bills
• savings
• everyday spending

If you’re not sure of the exact figure, check your most recent payslip or your banking app. It’s hard to set realistic limits if you don’t know what you’re working with.

Track where your money goes

Next, look at how you’ve actually been spending. Your bank app, card statements or budgeting apps like Emma or YNAB can help.

Pay close attention to spending on:

• takeaways
• food and groceries
• subscriptions
• shopping and clothes
• nights out and entertainment

You may be surprised by how much goes on small, frequent purchases like coffees, snacks or impulse online buys.

Smart tips to stick to your limits

Here are a few simple strategies that make it easier to stay within your spending limits, even with contactless payment limits being raised.

Use cash for social events or nights out

Withdraw a set amount before you go out and leave your cards at home. When the cash is gone, the spending stops.

Try a prepaid card

Top it up with your weekly spending money. It gives you the freedom to spend, without the risk of going over budget.

Create separate bank accounts for different things

Keep your bills, savings and day-to-day spending in separate accounts. This helps you avoid dipping into money that’s meant for something else.

Set spending alerts in your bank app

Most banks let you set up notifications or even daily and weekly limits. These gentle reminders can help keep your spending in check.

Use the envelope method

The envelope method is old-school but effective. Take out cash for different spending categories, like food and coffee, and keep them in separate envelopes.

By setting personal limits, tracking your habits and using smart tools, you can stay in control, no matter how easy it gets to spend.

Use our free budget calculator to help take control of your money. Remember, the more accurate the figures you enter, the better the results.