Better Have a Credit Card If You Plan to Rent a Car

If you’re thinking about taking a family trip this summer, or simply need to a rent a car for a business trip or, make sure you’ve got a credit card handy.

If you show up to a Hertz or an Avis without a credit card, you could find yourself walking away on foot.

Most, if not all car rental companies require a credit card to serve as collateral if anything were to happen to your rental vehicle.

Car rental companies require a large deposit because vehicles are expensive and prone to theft, damage, and accidents.

Credit cards are acceptable because they typically have large lines of credit that will cover the extent of any costs associated with your rental, while cash and debit cards may fall short.

Most gold and platinum credit cards also provide some form of insurance for rental cars, though the terms and type of insurance vary by card issuer, and may not cover all vehicles and providers.

Debit cards (also known as check cards) issued under a VISA or Mastercard logo which draw funds directly from the cardholder’s account may be used to qualify for a rental, but prepaid and stored value cards typically are not accepted to qualify for rental.

Debit cards must also have available funds for the amount of the rental charges plus an additional amount to cover any incidental charges in order to secure the rental, and you may have to present a second form of identification as well.

If debit card is acceptable, the car rental company may place a hold on an amount in excess of the estimated rental charges, limiting your ability to use those funds until the car is returned.

The hold may take up to 2 weeks to be released by your bank, creating a huge headache if you need access to those funds during the trip or shortly after.

Keep in mind that debit cards, prepaid credit cards, or stored value cards issued under a VISA or Mastercard logo may be used as a form of payment when you return the vehicle.

And cash rentals may be accepted with special ID cards issued by the rental companies, though they carry additional fees, and typically take several weeks to apply for, so you need to arrange this type of payment well in advance of your rental.