By Michael | AutoSlash
Published by rentalcars1.com on Apr 27, 2020
Want to rent a car with a debit card? Consider heading to Dollar or Thrifty. Those two firms just changed their policy and have made it much easier to rent a car with a debit card. At other major firms, it’s still possible, but you need to meet certain conditions, which are in place precisely because rental car companies would much rather that you use a credit card.
So why do rental car companies want you to pay with a credit card? In a nutshell, because it’s less risky for them.
Why Rental Car Companies Prefer Credit Cards
When you rent a car, you drive away with a valuable asset. The rental car company wants to have recourse if you damage it or fail to return it. Rental car companies would rather that you pay for a rental with a credit card because it reassures them that:
- You’re an actual person with a real identity. You’ve already been vetted by the credit card issuer.
- You will be able to pay for the rental and for any damages that might happen.
- You have a good credit score and therefore can be trusted. Again, having a credit card shows that a financial institution trusted you with unsecured credit.
- You will return the vehicle because you want the hold and deposit on your card returned to you,
If you pay for a rental car with a debit card and don’t return the car, the rental car company might have more difficulty recovering funds from you. Rent with a credit card, and it’s more likely that the company can track you down and get its money back.
Credit Cards vs. Debit Cards
Some personal financial experts recommend not having a credit card at all, even for rental cars. Dave Ramsey says that he always pays for rental cars with a debit card without issues and that there’s never a need for a rental car company to run a credit check in order to rent a car. Yet he also adds the disclaimer that you should check in advance with the rental car provider or even use a ride-sharing service like Uber instead.
The problem is that not all renters are like Dave Ramsey—rich, famous, debt-free, and able to have a block on their account of the estimated rental costs plus up to $500. Many renters would not have that $500 cushion in their bank accounts. If you rent from Dollar or Thrifty, the amount of the hold will be $200.
Even more relevant is that Ramsey misses that there are valid reasons for a rental car company to give more scrutiny to rental car transactions made with debit cards. Company policies are based on big data—billions of past rental car transactions that show debit cards pose a greater risk.
What’s the best reason to use a credit card to pay for a car rental? A credit card usually provides some form of insurance coverage for rental cars. This makes rental car companies happy because it means the renter likely has insurance coverage for any damage that happens to the vehicle. The rental car company knows the credit card company benefits will likely cover any damage to the rental car.
Requirements to Rent a Car with a Debit Card
There are a lot of rental car companies in the U.S., so we narrowed our analysis to those providing more than 97 percent of the domestic rental car market: Advantage, AvisBudget Group (Avis, Budget, and Payless), Enterprise Holdings (Alamo, Enterprise, National), E-Z Rent-A-Car, Fox Rent A Car, Hertz Global Holdings (Dollar, Thrifty, Hertz), Rent-A-Wreck, SilverCar, and Sixt.
Only two of the 15 major rental car firms will rent to debit cardholders with the same ease as renting to credit cardholders. As of February 2019, Dollar and Thrifty now accept debit cards on nearly equal footing with credit cards. As long as you make a reservation at least 24 hours in advance and aren’t booking specialized car types like convertibles, you can rent from Dollar and Thrifty with a debit card much as though you were using a credit card, with no credit check or extra documentation required. (The new policy is only guaranteed at corporate-owned stores in the U.S. — like all the companies, Hertz has somewhat limited control over policies their franchisees use.)
At all the other major rental car companies, a customer with a debit card can expect to encounter the following requirements:
- The debit card must be bank-issued, not prepaid.
- There will be a security deposit placed on the card.
- The company will run a credit check.
- The renter may be asked for multiple forms of ID and possibly proof of residence.
- The renter must show proof of insurance.
- The renter may be asked for proof of pre-paid travel.
- Franchisee locations may be able to opt-out.
- There may be additional location-specific rules.
There may be additional restrictions:
- Additional age restrictions based upon the payment method
- Local driver restrictions
- Major city prohibitions
- Rural area prohibitions
- Vehicle type restrictions
- Additional driver restrictions
Debit Card Policies at Rental Car Companies
Note that there may be location-specific policies that are more extensive than the broader corporate policies.
Advantage: Debit cards must have Visa, MasterCard, or Discover logo. There is a security deposit up to $350, a likely credit check, and international travelers (even international residents of the U.S.) must have a return ticket to an international destination.
Alamo: Debit cards must have Visa, MasterCard, or Discover logo, Debit cards require documented proof of round-trip travel and a security deposit.
Avis: Debit cards must have Visa or MasterCard logo and only for those renters 25+. Debit cards almost certainly result in a credit check, cannot be used for premium vehicles, are not accepted at many urban/rural locations. Locations add monetary holds at local discretion.
Budget: Locations may use a national credit verification bureau and will require a third form of identification at the airport/off-airport. Franchisees are not required to accept debit cards.
Dollar: Debit cards are accepted by drivers at least 20 years old with a valid driver’s license. Debit cards will not trigger a credit check or a second form of approved identification. Both debit and credit cards are subject to an “authorization hold” at the start of a rental for estimated charges plus $200; if you use a debit card will lock up this amount in your bank account during your rental.
Enterprise: For rentals at airport locations, debit cards require documented proof of round-trip travel, security deposit amounts vary by location. For non-airport locations, debit cards may or may not be accepted (varies by location), deposit/security deposit amounts vary by location.
Fox Rent A Car: Debit cards must have Visa, MasterCard, or Discover logo. Round-trip itinerary and/or credit check through Experian plus deposit based upon traveler type. Fox restricts car classes to Economy, Compact, Midsize, Standard, Full-size, and Minivan. Debit card users cannot add additional drivers.
Hertz: Debit cards must have Visa or MasterCard logo and only for those 25+ (off-airport). Debit cards almost certainly result in a credit check, are not accepted at many urban locations, and require a second form of approved identification. Locations add monetary holds at their discretion (up to $350 or 15%).
National: Debit cards must have Visa, MasterCard, or Discover logo. Requires documented proof of round-trip travel, deposit amounts vary by location, vehicle types are limited and vary by location.
Payless: The company limits vehicle types (Economy, Compact, Intermediate, Standard, Full-size, Premium car, SUVs, and Minivans only), adds a $350.00 security deposit, and may run a credit check. Will allow the customer to use a credit card even if the credit check fails.
Silvercar: Silvercar only rents 2017 Audi A4s. Renters are not allowed to drive the Audi A4 with a debit card (no exceptions).
Sixt: Debit card policy is based per location, is entirely discretionary but requires two different forms of ID. In-state renters can only rent up to an Intermediate Car. Out-of-state residents cannot rent premium, luxury, or extraordinary vehicles. Sixt can hold up to three times the expected rental cost as a deposit.
Thrifty: Debit cards are accepted by drivers at least 20 years old with a valid driver’s license. Debit cards will not trigger a credit check or a second form of approved identification. Both debit and credit cards are subject to an “authorization hold” at the start of a rental for estimated charges plus $200; if you use a debit card will lock up this amount in your bank account during your rental.
What You Need to Know About Renting a Car With a Debit Card
- Most rental car companies have complicated rules that may be more stringent at some locations (especially at franchises).
- Funds for security deposits and holds might be tied up for an extended timeframe—up to three weeks after the rental ends.
- Debit cards don’t have the same consumer protections as credit cards for billing disputes.
- Many credit cards provide insurance coverage for damage to a rental vehicle that a debit card will not. If a renter wants rental car damage protection, the renter may have to buy it separately
- Credit cards put the consumer in a stronger position to contest charges than debit cards do because a credit-card user does not lose access to the disputed funds during a dispute.
- The rental car company has direct access to the checking account after a rental if there’s alleged damage.