Car rental with a debit card: Things to know

Young woman at dealership renting a carImage: Young woman at dealership renting a car

In a Nutshell

You may be able to rent a car with a debit card, but it might not be convenient. Car rental companies that allow car rentals with a debit card can have additional rules for debit card transactions that are above and beyond what’s required when paying with a credit card.
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Rental car agencies may let you rent a car with a debit card, but you’ll usually need to jump through a few extra hoops before you can drive the car off the lot.

Car rental companies may request multiple forms of identification, perform a credit check, and set age requirements for drivers who want to rent with a debit card. And debit card policies can vary from location to location — even with the same company.

Here are some things to know about renting a car with a debit card.

What should I know about car rentals with a debit card?

Renting a car with your debit card means you’re essentially renting with the cash you have in the checking account that’s connected to your debit card. There’s no credit line that can be charged if you damage the car.

Because of the financial risk, some rental car agencies set strict requirements for debit card transactions. Specifics vary from one rental company to another, but here’s some common fine print to watch out for.

1. Age requirements. Rental car companies will often rent to drivers who are 21 to 24 years old with a credit card as long as they pay an underage charge. But a higher age restriction may apply for renting with a debit card.

2. You may face a credit check. Some rental companies may require you to agree to a credit check for debit card transactions. Before renting, you should confirm whether a soft or hard credit inquiry will be necessary. A hard credit inquiry may lower your credit scores by a few points.

3. You may need to show multiple forms of ID. Rental car companies may require drivers who want to rent with a debit card to present a valid driver’s license, proof of insurance, and one or two other pieces of personal identifying documents like a utility bill, passport, military ID or store membership card.

4. You may get billed upfront. The rental car company may want you to authorize payment from your bank account for the total estimated cost of the rental when you pick up the car.

5. The rental company may put an additional hold on your debit card. Besides authorizing your bank account for the estimated cost of the rental at the time of pickup, some rental car agencies put a hold on your debit card for an additional amount of money as a security deposit. The amount held is at the discretion of the rental location. It may be hundreds of dollars, depending on the company and location you rent from.

You won’t be able to use the blocked funds until the hold is removed, which generally doesn’t happen until after you return the car. If you use the same card to pay at the end of the rental, the hold on your account may disappear in a few days. But it can take up to 15 days for the hold to be removed if you use another card to pay for the rental.

6. The rental car agency might ask for a travel itinerary. Depending on where you rent from — an airport or off-airport location — rental companies may ask about your travel plans and request to see a trip travel ticket (including evidence of return travel) on an airline, cruise or train.

7. The type of car you can rent might be limited. The rental agency could limit you to certain types of cars when renting with a debit card — luxury cars or convertibles may be off-limits.

If you’re unable to use a debit card at the start of the rental, you may have the option to put down a credit card upfront and then pay with your debit card when you return the car.

What are some pros and cons of renting a car with a debit card?

Pros of renting a car with a debit card

  • No need to worry about interest — Renting a car with a debit card means you won’t incur interest charges like you might if using a credit card.
  • Doesn’t contribute to debt — Paying with a debit card means you won’t be creating debt. Even if you plan to pay off the rental charge right away, you might be tempted to roll over the debt to the next month if you pay with a credit card.
  • Debit card use doesn’t appear on credit reports — Credit card use can appear on your credit reports and affect your credit scores. Debit card use doesn’t appear on credit reports — so while you can’t build your credit by using a debit card, swiping that card won’t directly affect your credit in a negative way, either.

Cons of renting a car with a debit card

  • Fewer protections — Debit cards don’t typically come with the same protections that some credit cards have, like fraud liability and car rental protection.
  • An account hold could drain your cash — The extra hold on funds in your checking account may be problematic if it blocks money you were planning to use right away. And if charges on the debit card exceed the amount of money in your bank account, your card could be declined or you could be hit with overdraft fees.
  • Debit card use doesn’t appear on credit reports — Depending on your point of view, this could be a pro or a con. If you’re working on building your credit, healthy credit use can benefit you — but your debit card use won’t appear on your credit reports, so it won’t help you build credit.

Debit card policies for renting a car tend to be strict, but that could be changing. Dollar Rent A Car, for example, has recently updated its debit card policy. When paying with a debit card, the rental company no longer does credit checks, doesn’t restrict your travel plans and will rent to drivers younger than 25.

Should I rent a car with a credit card instead?

Renting a car with a credit card may be easier, and it has its advantages. Credit card use can give you an opportunity to earn cash back, miles or points if your card has a rewards program.

And some major credit cards offer rental car protection for cardholders, which may cover you if the car is damaged or stolen. The extent of the credit card rental coverage varies from one card to another, so make sure to read the fine print or call the credit card issuer for details.

Credit cards may also offer $0 fraud liability protection, which means you won’t be responsible for fraudulent charges if the card is lost or stolen. But if your debit card gets into the wrong hands, you may be liable for a portion of the unauthorized charges.

What if I have to use a debit card?

If you’re not able to use a credit card or other form of payment for your car rental and must rely on a debit card, here are some steps you can take to prepare for your rental.

  • Contact the rental location you want to rent from, and ask for its requirements so you’re prepared when you reach the rental counter.
  • Carefully review the rental agreement before you sign it and leave with the vehicle.
  • Be aware of your budget and how any additional amount the rental company may hold will affect your travel budget.
  • Don’t deplete your savings or emergency fund to rent a car. If you use a debit card, make sure it’s tied to the bank account you use for regular spending and not a savings account with your emergency fund or long-term savings. These accounts should be separate and used only in a true emergency. Using this money regularly for everyday spending can mean savings isn’t there when you need it.
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Bottom line

It’s possible to rent a car with a debit card, but some limitations may make it inconvenient. It may be easier to use a credit card for the transaction or pay with cash from your checking account. Plus, healthy credit card use — like paying off a balance by the due date — can help you build your credit in the long run.

About the author: Taylor Medine is a freelance writer who’s covered all things personal finance for the past seven years. She enjoys writing financial product reviews and guides on budgeting, saving, repaying debt and building credit. … Read more.