Credit card ok to tap in and out of Tube?

Yes to all.

will it have a day cap if I use it often?

Yes, but only if you use the same one every time that day.

Your questions answered here:

https://tfl.gov.uk/fares/how-to-pay-and-where-to-buy-tickets-and-oyster/pay-as-you-go/contactless-and-mobile-pay-as-you-go

As a tourist I'd much rather take a chance on losing an Oyster card than my credit/debit card to pickpockets or carelessness.

I just spent three weeks in and out of London and used my credit card multiple times a day on the tube with no issues. Easy and convenient!