Car Rental Payment Options | Credit vs Debit Card

Your car rental payment options are a credit card first, debit card, and cash.

Paying with a credit card is most convenient – provided you have enough available credit to cover the projected costs plus the security deposit. In addition, the company will place a hold on your account, which could limit your other trip spending.

Paying with a debit card is the next best option. However, be prepared to jump through extra hoops – including a possible credit check, extra forms of identification, trip tickets, and more.

Paying with cash is the final alternative. However, you must apply for a cash ID card at least thirty days prior to arriving at the rental counter. You just cannot show up with a wad of money and expect to drive away that day.

Car Rentals With Credit Cards

Renting a car with a credit card is the preferred option – provided your available credit is high enough. You will need to cover the hold amount, and other expenses you may charge during your trip – including possible damages, late return fees and more.

Using a credit card to complete the transaction shows the rental company that you are trustworthy. The company knows that the issuing bank did its due diligence before allowing you to borrow their money. They feel more comfortable allowing you to drive away in an automobile worth $30,000 or more.

Table Of Contents

Credit Card Hold

It is a common practice for car rental companies to place a credit card hold of the total estimated charges plus a possible security deposit of about 25%. The minimum hold amount is roughly $200.

These factors could influence the credit card hold amount.

  • Daily charges
  • Number of days
  • Vehicle upgrades
  • Collision damage insurance
  • Optional refueling plan
  • Accessory items
    • Roadside assistance
    • Sirius radio
    • Onboard navigation
    • Infant child seats
  • Size of the security deposit

Keep in mind that each rental brand has a unique policy regarding credit card hold amounts. Also, the policy can vary by location for each company. They will release the hold – less any extra charges shortly after you return the vehicle.

Available Credit

The amount of available credit needed to rent a car is much more than people think. Available credit is the account limit minus the current balance. The available credit amount shrinks each time you place charges on the account.

You need enough available credit to cover the hold when picking up the vehicle, to spend money on your trip, and then to cover any additional expenses when you return the auto.

  • Vehicle pickup: requires the available credit to exceed the hold amount
  • Trip spending: you may charge gas, food, hotel, and entertainment expenses
  • Return of auto: there could be added fees for late returns, damage, fuel, etc.

Therefore, it pays to forecast all of these trip expenses. Also, you can make a payment to the bank or do a balance transfer at any time – which immediately increases your open to buy (available credit).

Insurance Coverage

Paying your car rental expenses with a credit card can also help you avoid costly collision damage insurance fees – which minimize the size of the hold. Many reward cards cover rental car insurance when you charge the trip to the account.

Verify the insurance coverage with the bank before arriving at the rental counter. The agent will be sure to require that you sign the collision damage waiver before taking possession of the auto. Preparation is the best way to avoid that queasy feeling when you waive the optional coverage. Who needs unplanned medical bills or repair expenses.

Secured Credit Card

It could prove to be more difficult to use a secured credit card when renting a car. Money deposited into a bank checking account supports a secured credit card. The bank rarely lends funds above this amount – but can in small increments.

Secured credit card car rental transactions face two main obstacles.

  1. The open to buy is often too small to support the projected rental expenses, plus the security deposit, plus any spending during your trip, plus any extra charges on the return.
  2. The company may not accept secured credit cards for payment on vehicle pickup. For example, Enterprise states on its website that they accept major credit cards supported by a pre-determined line of credit, and not a bank account. This effectively rules out secured accounts.

Car Rentals Without a Credit Card

Car rentals without a credit card are necessary for many people. Fortunately, you no longer have to have a credit card in order to rent an automobile. You can use a debit card or pay in cash.

However, without a borrowing relationship, you will have to demonstrate that you are trustworthy through some other means. The company simply cannot allow just anybody to drive away in automobile worth $30,000 or more.

Debit Card

Using a debit card is often the best option to rent a car without a credit card. However, expect the company to require additional information, and/or place extra restrictions. In addition, each company will have a unique set of rules for customers paying upfront with a debit card.

Scan the chart below to see how each brand having debit card customers. They have unique ways of verifying trust levels and reducing risk by using these eight different factors.

  1. Security deposit: an amount above the projected rental costs to cover possible extra expenses such as late returns, vehicle damage, refueling, etc.
  2. Credit check: pull a copy of your consumer report and look at your score to determine the risk of loss
  3. Return trip: require copies of tickets for return trips via airplane, train, or cruise ship
  4. Forms of identification: could include a combination of these options
    1. Driver’s license
    2. Passport
    3. Utility bills
    4. Trip tickets
    5. Additional debit cards
    6. Membership cards
    7. Company badge
    8. Recent paystub
    9. Personal references
    10. Proof of insurance
  5. Vehicle restrictions: many luxury or high-end cars are off-limits
  6. Regional exceptions: office locations is certain metropolitan areas have stricter rules
  7. Timing of reservation: rules are often more lenient for reservations made with more than 24-hour notice
  8. Rental office locations: requirements are often stricter in non-airport locations where customers have fewer return trip tickets

No Credit Check

The list of car rental companies that accept debit cards without a credit check is very short. In addition, the companies that do not pull your consumer report compensate by adding other requirements in order to reduce their risk exposure.

We found only one company (Dollar) that affirms in writing that they do not do a credit check for debit card customers. Four others were silent on the matter. The remainder confirmed in writing that they do pull your consumer report.

  1. Alamo is silent on the matter. However, Alamo limits the use of debit cards for customers with proof they have deplaned or disembarked at the rental location.
  2. Dollar states that they do not perform a credit check. However, Dollar does not accept debit cards in many metropolitan areas in the Northeast and Detroit Michigan.
  3. Enterprise does not disclose its policy. However, Enterprise indicates that each branch determines policies about debit card acceptance. Many are independently owned franchises.
  4. National is silent on the matter. However, they limit debit card use to customers with proof of a ticketed return or outbound trip from the location where the vehicle will be returned.
  5. Thrifty does not disclose whether its policy. However, Thrifty bumps up the size of the security deposit and adds requirements for reservations under 24 hours.

Credit Score

It is very difficult to answer what is the minimum credit score needed to rent a car when using a debit card. It is common to have a low score when maxed out on revolving accounts or when behind on payments. In addition, people without credit cards lack history and trade diversity, which leads to a poor rating.

However, those with bad credit scores can take solace with these facts.

  • You can rent from companies that do not pull your consumer report – provided you meet other criteria such as return trip tickets and identity verification.
  • There is a good chance the car rental company will not consider credit scores at all. Credit scores predict future delinquencies on borrowing accounts – not auto rental losses.

In other words, you can rent a car with a low credit score by choosing the right outfit. Or, you might skate by with a poor rating because of a thin file or short history. The company may just be looking for late payments.

Prepaid Debit

Fewer rental car companies accept prepaid debit cards on the front-end of the transaction. However, most will accept prepaid debit cards as a form of payment at the time of vehicle return.

Prepaid debit cards are not associated with a bank account and do not require a credit check. These easy qualification features are attractive to consumers. However, the same features make auto rental companies wary of future losses.

  • It is difficult to place a hold for the security deposit
  • Lack of a bank account speaks poorly of the risk level

We were unable to find any car rental companies that state that they accept debit cards for payment on pickup. However, you might find an exception by calling some of the smaller or regional brands.

Cash Only

Renting a car with cash only is another way to avoid using a credit card. However, fewer companies accept cash because of the safety concerns it presents to their employees. Also, cash only customers present greater trust issues as there is no borrowing relationship or bank account to verify their identity.

Therefore, many companies require that you obtain a Cash Deposit Identification (ID) Card in advance of your rental. The application process can take up to 30 days and may include a small processing fee. Plan accordingly.