Want to rent a car with a debit card? It's 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.
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 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.
None of the 15 major rental car firms will rent to debit card holders with the same ease as renting to credit card holders. 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 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 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 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 requires a second form of approved identification. Locations add monetary holds at their discretion (up to $350 or 15%).
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.
E-Z: 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.
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 requires 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.
Rent A Wreck: Debit card must be linked to a checking account. The company verifies insurance is prepaid for at least 30 days beyond the rental, adds security deposit of $150, requires three forms of identification (driver’s license plus two others), return itinerary is required (based upon the state of license), yet policy still varies by location.
Thrifty: 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 requires a second form of approved identification. Locations add monetary holds at their discretion (up to $350 or 15%).
- The 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.
- If a renter wants the rental car damage protection provided with most credit cards, the debit card is not going to have it (even the debit cards with a Visa or MasterCard logo).
- The rental car company has direct access to the checking account after a rental if there’s alleged damage.