The Chicago Transit board set rules for the new program, called Ventra, Wednesday.
The system will go into effect this summer.
People will be able to use Ventra cards, or their own personal credit or debit cards, to board trains and buses.
Fares will remain the same, as long as people register their Ventra cards.
It will replace the current Chicago card, and the current magnetic stripe paper tickets sometime in 2014.
Officials also approved a 33-percent hike in the cash rail fare from $2.25 to $3.
There will also be a $5 a month penalty for people who don’t use their Ventra cards within a year and a half.