Most places I've been have both types of options. Think of it like cell phones. You can "pay-as-you-go" or get the automatic monthly contract. The smart card in London works the same way. You get the card, and then you can add a daily, weekly, or monthly pass to it, and do automatic renewal from your CC if you wish.
Or, you can add a specific amount of money ($20 or whatever) and use it until it runs out. They debit your account for whatever rides you use.
Michael
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