The Oyster Card is Transport for Londons system of pre-paid plastic cards which offer unlimited travel on all TfL services until the credit on the card expires. It is the easiest and most convenient way of travelling within London, although visitors should be aware that it does not necessarily work at all overground stations.
The Oyster Card will only work in stations covered by Transport for London, rather than one of the other operators, and grants the right to travel within all six zones of Londons transport network. This means that you can not only travel on the Tube, but also on the DLR, overground train, buses, trams, and even to get a discount on river boat fares. They should cover all of your travel on public transport within London, but be aware that some of the major London airports like Stansted and Gatwick are not within the zones covered by the Oyster card, although Heathrow and City airports are.
You can buy Oyster Cards prepaid with a certain amount of credit, from £10 up (although there is a £3 activation fee on each card). When you are using the card, it will work out the cheapest fare for you to have been charged for all of the journeys you make, and debit that amount from the credit on the card. When the credit has expired, the card can be recharged using a machine at any of the London Underground stations, or any ticket office at an overground station.
You can purchase Visitors Oyster Cards from the Transport for London website. To estimate the amount of prepaid credit you will need, its best to take the number of days you are going to be spending in London, how much time you are going to spend sightseeing or travelling using the card, and whether or not you will be travelling at peak times. Peak times cover the morning rush hour, and, if you are travelling around the city, you will find that it is much cheaper (and less crowded) if you can wait until after ten in the morning to start your days travels.
The prepaid cards are available with many different levels of credit on, so you should be able to calculate roughly how much you will need, in order to see all the things you want to see and do all of the things that you want to do.
The card itself is a contactless one that you press against a pad to open the transport barriers. You do not need to insert it into the machines. In all the Visitors Oystercard offers reasonable value and great flexibility no matter what your plans whilst you are in London.
Visit the TFL Website for more info about Oyster where you can download the following pdf