Paying for a Rental Car with a Credit vs Debit Card

There are advantages to paying for your rental car with a credit card.
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Rental car companies' policies regarding acceptable payment methods, deposits, and holds on funds vary widely, both by company and by individual rental car office. Within the same rental car company, two local rental offices may have different policies on debit card acceptance, deposit (or hold on credit card) amounts, and reservation policies. State laws affect rental car office policies, too.

When you reserve a rental vehicle, take the time to review your location-specific rental agreement, provided your rental car company allows you to see it online when you book your rental vehicle.

This rental agreement will tell you whether or not you can pay with a debit card. If you can't see your agreement, call your rental car office, even if it is in another country, and ask about payment options for your reservation.

Paying With a Debit Card

In general, within the United States, you should consider the following issues if you want to use your debit card to reserve and pay for your rental car:

  • Many US rental car companies accept debit cards for payment when you return the car, but require you to give them your credit card information when you pick up your rental vehicle. Similarly, many Canadian rental car offices will not allow you to pick up your rental vehicle using a debit card; you will need to allow the rental car agent to swipe your credit card when you sign the rental agreement.
  • Some rental car companies will only accept debit cards that carry a VISA or MasterCard logo.
  • Those rental car companies that do allow you to pick up your car using a debit card will usually only permit you to use your debit card to guarantee your rental if you pass their credit check criteria. This means that the rental car agent will run a credit check on you, probably through Equifax, while you are standing at the counter.
  • If your rental car company permits you to pick up your car using your debit card, the rental car agent will place a hold on funds in the bank account tied to the debit card for an amount equal to the estimated rental charges plus an extra deposit, typically $200 to $300. This deposit amount varies by location and other factors; you will need to telephone your rental car office to find out the deposit amount for your rental. Your deposit will be returned to your bank account after you drop off your rental car.
  • Should you return your rental car late or in a damaged condition, your rental agreement gives the rental car company the right to withdraw additional funds from your bank account to cover late fees and/or damage repair.

Paying With a Credit Card

If you plan to reserve and pay for your rental vehicle with a credit card, you should consider these issues:

  • You may not need to provide credit card information when you reserve your rental car, but you will need to show your card and a photo ID to the rental agent when you pick up the vehicle. The agent will swipe your card and ask you to sign the rental agreement.
  • Nearly all US rental car offices put some kind of hold on your credit card when you pick up your rental vehicle. Typically, this amount is equal to your estimated rental charges, which you can obtain when you reserve your rental vehicle, plus the greater of a fixed-dollar amount or a percentage (normally 15–25 percent) of the estimated rental charges. In other words, if your estimated rental car charges are $100, your credit card hold will be $100 plus either a specific deposit amount ($200 is a good starting number) or $15 to $20, whichever is greater. In our example, your total credit card hold would be $300.
  • When you return your car, the hold will be removed and your credit card will be charged for the actual amount you owe. If the car is damaged or returned after the deadline, you will face additional charges.
  • Prepaid VISA and MasterCard cards are not accepted at every rental location. If you would like to pay for your rental car with a prepaid VISA or MasterCard, call the rental car office before you make your reservation and ask if it will be accepted.

Which Payment Method Is Better?

In general, paying with a credit card is the better choice, for the following reasons:

  • You do not have to give the rental car company direct access to your bank account.
  • You can dispute charges through your credit card company if you believe you were charged in error.
  • You do not have to undergo a credit check, which could affect your credit rating.
  • All major rental car companies accept credit cards.