If you've got a contactless credit or debit card, you don't need an oyster card. Since September 2014 you can just tap in using that contactless card everywhere you can use an Oyster card, and it charges you the same rate as an Oyster card, with the same daily capping policy.
(there are other high tech "contactless" options too like NFC smartphone apps that work the same way, check this TFL list if you like being unable to travel if your gadget's battery runs out
Basically, since this was introduced, there's no reason to have an oyster card unless:
- You don't have a contactless card or it's a card where your bank might charge you to use it (e.g. for a non-UK account)
- You're a commuter or regular traveller with a weekly, monthly or yearly travelcard (which still need to be assigned to an oyster card).
- You're under 18 and can get one of the children's cards with lower rates.
...and there's no reason to get a one-day travelcard unless there's both a) a special offer on travelcards (e.g. with a rail or tourist attractions ticket) that makes it cheaper than the oyster/contactless daily cap (e.g. £6.40 for zones 1-2, £4.40 for buses and trams only - regular 1-day travel cards are £12) and b) you'll need enough transport that it's worth it (e.g. three tube journeys if it's ~£6).
Be careful to use the same card for all journeys, as it caps it at or below the cost of a travelcard (just like an oyster card does), meaning this is better than a day travelcard: you might spend less this way and can't spend more. The system is designed so that oyster or contactless is never more expensive than buying a travelcard (unless you're offered a special offer), to encourage people to pay the fastest way which involves least queues, machines, staff time etc.
And beware of the dreaded "card clash" where multiple contactless cards interfere with each other, if, for example, they're all in the same part of your wallet and you tap in by plonking your wallet on the card reader. Keep the card you use to tap in and out on its own when you use it, and if you keep it in your phone case, turn NFC off on your phone to avoid the battery being drained by your phone constantly trying to talk to your card and getting confused that it doesn't answer...
Here's what TFL say, from the contactless section on their website:
If you currently use pay as you go [oyster card], travelling with a contactless
payment card is a good alternative. You are charged adult-rate pay as
you go fares, but you won't have to worry about running out of credit
and could also benefit from daily and Monday to Sunday capping.
To benefit from capping you need to choose one card and use it for all
your travel. We can't link the travel charges on your Oyster card with
those on a contactless payment card.
...and you also save the £5 Oyster card 'deposit'.
Here's confirmation that contactless cards benefit from capping:
With a contactless payment card you can:
- Use pay as you go and benefit from daily and Monday to Sunday capping
(Monday to Sunday capping is a contactless-card only thing that caps a calender week at £32.10 for zones 1-2, other prices for other zones)