Is It Easier to Lease an Auto with a Charge Card Or Debit Card?

Last Updated on February 6, 2023 by Michael

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.

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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 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.

Debit Card Policies at Other Rental Car Companies

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.

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.

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Rent A Wreck: Agencies only accept debit cards that are linked to checking accounts. The company will verify that insurance runs at least 30 days beyond the rental. Paying with a debit card adds $150 to the security deposit. In addition, the agency typically requires three forms of identification (driver’s license plus two others).

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.

Disclaimer: the information above is a general overview of policies and is accurate to the best of our knowledge. However, policies vary by location and can change at any time. Please contact the rental agency directly or carefully review the booking terms and conditions before planning to use a debit card to qualify for a rental. When reserving a rental car through AutoSlash, please note that AutoSlash cannot be responsible for rentals denied by the rental agency and is unable to waive or reimburse any cancellation penalties associated with a denied rental. AutoSlash recommends all customers use a credit card to qualify for their rentals.

Related:

Can You Pay for a Rental Car with Cash?
Credit Cards with Primary Car Rental Insurance

The post Is It Easier to Rent a Car with a Credit Card Or Debit Card? appeared first on AutoSlash.

Frequently Asked Questions

Can I rent a car and drive around Europe?

Yes, you can. You'll need to book yourself on an organized tour and pay for each day separately. There are many companies that offer these tours.

If you are looking for more flexibility, you might want to look into hiring a car through one of the primary travel agents. These agencies offer many services, including car rentals or city transfers.

They often collaborate with local suppliers who specialize on providing quality vehicles at fair prices.

Can you rent a car in Europe with a US license?

It depends on which country you are visiting. If you are going to France, for example, you can rent cars there but not if you want to go to Italy because they don't accept US driver's licenses.

Do I need separate car insurance to drive in Europe?

You may want to consider adding coverage for other drivers if you drive abroad.

This is because different rules may apply to who is liable if an accident happens between cars from different countries.

If you are considering taking out additional cover, be sure to carefully read the small print.

Also, verify if your existing policy covers international travel. This is what's commonly known as an "extended Warranty" and you may find it more cost-effective to purchase it individually.

What's the difference in a rental car for domestic or international use?

Cars made in domestic are generally cheaper, but they offer fewer features than cars made abroad.

International cars can be more costly but offer better safety and comfort such as air conditioning and seat belts.

Based on the amount of mileage you intend to travel daily, you should choose the car that best suits your needs.

If you will mostly be traveling within 100 miles of the airport, then you should get a local car (domestic) as these are generally cheaper.

But if you will be doing lots of driving around cities and going off-road, then you should opt for an international model.

Can I pay with credit cards for a car rental?

Yes. However, you should be aware of the possibility of additional fees when using your card overseas. Compare rates before making a booking. Some websites will allow you to reserve without paying until after you arrive, saving you money.

What do you need to rent an automobile in Portugal?

An international driving licence is required to rent a car in Portugal. You should also have proof of insurance and valid credit cards for payment purposes.

When you make a reservation, the rental company will usually require that you provide a passport or national ID card.

When renting a vehicle in Portugal, you may be asked to show two forms of identification (passport/national ID card).

These are required by law to comply with the European Union regulations on road traffic safety. You may not be allowed to drive the vehicle if you are unsure of your identity.

An International Driving License is not required if you are not a driver.

This document must be translated into Portuguese, and all documentation required to support it must also be included. Although the cost of this document will vary depending on where it is located, it generally runs between $20-30 USD.

It is possible that you will be denied entry to the vehicle if your translation does not match what you have provided.

Statistics

If you're a member of AAA, you might also be able to snag discounts of 10 percent at Thrifty, and 8 percent at Dollar. (afar.com)
For canceled trips two days or shorter, a guest is charged 50% of one day's trip cost. (insider.com)
American Airlines, for example, offers AAdvantage members 35% off Budget and Avis — but you need to rent from an airport. (nerdwallet.com)
Automatics are more expensive (usually about 50 percent more) and may only be available if you upgrade to a bigger, pricier car. (ricksteves.com)
I'd say 70% of the time, we have a hassle-free encounter, but there have been certain companies that we prefer not to use anymore. (theworldpursuit.com)

External Links

enterprise.com

jdpower.com

autoslash.com

AutoSlash is the #1 site for cheap car rentals

alamo.com

How To

How can I avoid being charged for pre-existing damage to my rental car?

Consider, for example, what happens to the rental vehicle if you drive it for only a few minutes before returning it back to the rental agency. Do you get charged for any damage that is caused by a scratch to the rental car? This is a common issue among those who rent cars from different companies. Customers may be charged even though they didn't cause any damage when renting their cars. Avoid these charges by asking whether you will be charged for scratches or dents on the vehicle. These are the steps you can take to ensure that no charges will be made for damage done before renting a car.

Ask for a copy of the agreement;
Check the description of the car thoroughly;
Please read carefully the fine print.
Ask for a complimentary cleaning;
Pay attention to the condition of your car.
Keep everything in the car.
You should always bring cash when renting a vehicle.
Keep all payments in receipt.
Do not let anyone touch the car without your permission;
Never accept a gift offered by the company.
Reputable rental agencies are recommended.
You should always bring the contract.
The car must be returned in good condition.
Please provide your contact information to the agent.
Avoid using the same company as often as possible;
Make sure to note all details about the car: such as mileage, model and engine size. ;
Take photos of the damage;
Wash the car by yourself
Ask a third party to inspect the vehicle.
Never accept additional fees.

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