Want to rent a car with a debit card? It’s possible, but you need to meet a more rigorous set of 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 far 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. The credit card company has already vetted you.
- You will be able to pay for the rental and for any damages that might happen.
- The rental company trusts renters with good credit scores. 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 hold on their account of the estimated rental costs plus up to $500. Many renters would not have that $500 cushion in their bank accounts.
But Ramsey misses something important. There may be 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 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 US. We narrowed our analysis to companies that provide more than 97 percent of the domestic rental car market: Avis Budget Group (Avis, Budget, and Payless), Enterprise Holdings (Alamo, Enterprise, National), Fox Rent A Car, Hertz Global Holdings (Dollar, Thrifty, Hertz), Rent-A-Wreck, Silvercar and Sixt.
None the major rental car firms will rent to debit card holders with the same ease as renting to credit card holders. At all the major rental car companies, a customer with a debit card can expect that the rental car company will:
- require a bank-issued debit card. Prepaid card won’t fly.
- place a security deposit on the card that you will not get back until after the car has been returned.
- run a credit check.
- require multiple forms of ID and possibly proof of residence.
- ask for proof of insurance.
- require proof of pre-paid travel
There may be additional restrictions:
- Additional age restrictions based upon payment method
- Local driver restrictions
- Major city prohibitions
- Rural area prohibitions
- Vehicle type restrictions
- Additional driver restrictions
Debit Card Policies at Major Rental Car Companies
Note that there may be location-specific policies that are more extensive than the broader corporate policies.
Avis Budget Group
Avis: Debit cards must have Visa or MasterCard logo and only for those renters 25+. Debit cards can trigger a credit check. You can’t rent a premium vehicle with a debit card. Locations add monetary holds at local discretion.
Budget: Locations may use national credit verification bureau and will require a third form of identification at the airport/off-airport. Franchise locations might not accept debit cards.
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.
Hertz Global Holdings
Hertz: Customers who pay with debit cards must be at least 18 years old with a valid driver’s license and another form of ID. Debit cards will trigger a soft credit check (meaning that it will not impact your credit score) or a second form of approved identification. Locations add monetary holds equal to the estimated charges plus $500. You will not have access to those funds during your rental. You will also be required to present a credit card in the driver’s name.
Dollar: Customers who pay with debit cards must be at least 20 years old and have a valid driver’s license and another form of ID. Debit cards will trigger a soft 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 $500; if you use a debit card will you lock up this amount in your bank account during your rental. You will also be required to present a credit card in the driver’s name.
Thrifty: Customers paying with a debit card must be at least 20 years old with a valid driver’s license and another form of ID. Debit cards will trigger a soft 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 $500; if you use a debit card will you lock up this amount in your bank account during your rental. You will also be required to present a credit card in the driver’s name.
Enterprise Holdings
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.
National: Debit cards must have Visa, MasterCard, or Discover logo. Customers must have documented proof of round-trip travel. The agency will hold a security deposit, and the amount will vary by location.
Alamo: Debit cards must have Visa, MasterCard, or Discover logo, Debit cards require documented proof of round-trip travel and a security deposit.
Renting a Car With a Debit Card
- The rental car company may hold security deposits for 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.