credit & debt

It's Easier to Rent a Car With a Debit Card

At Dollar Car Rental and Thrifty Car Rental, you now face fewer requirements to rent using a debit rather than a credit card. And the hold on a renter’s bank account dropped from $350 to $200.

If you try to rent a car with a debit card rather than a credit card, you usually have to jump through extra hoops—typically a credit check and a hefty “hold” placed on funds in your bank account. Many car-rental agencies also require debit card users to produce extra ID besides a driver’s license, such as a passport or utility bill, and a copy of your travel plans.

Dollar Car Rental and Thrifty Car Rental—both subsidiaries of Hertz—recently made the process less painful. Debit card users are no longer subject to a credit check, and to rent most vehicles, you need only a driver’s license as proof of identity if you book at least 24 hours in advance. Dollar and Thrifty renters ages 20 to 24 can also use a debit card; previously, you had to be at least 25. And the hold on a renter’s bank account dropped from $350 to $200.

Travelers commonly encounter holds for car rentals and hotel reservations on credit cards as well as debit cards. But holds can be more problematic for debit card users, who lose access to real money in their bank accounts. Holds often last the length of the reservation, plus any extra time the bank takes to post the funds back to your account.

Holds are common because the total charge may change between the beginning and end of the transaction, says Raquel Cardenas, executive vice president for Frost Bank. A hotel customer, for example, may rack up charges for Wi-Fi or room service; a rental-car customer may return a car late or without filling the gas tank. The amount of a hold can add up quickly, says Ted Rossman, of CreditCards.com. Some hotels, for example, hold a certain amount each day for incidentals, plus charges for the room and taxes.

Credit cards are more likely than debit cards to offer perks such as insurance coverage if you decline a car-rental agency’s collision-damage waiver, or travel insurance to cover nonrefundable expenses if your trip is canceled or interrupted. If you use a travel rewards credit card, you may get extra points or cash back, or you may be reimbursed up to a certain amount yearly for travel purchases.

Most Popular

Senate Passes $3,000 Child Tax Credit for 2021
Coronavirus and Your Money

Senate Passes $3,000 Child Tax Credit for 2021

The provision would temporarily increase the child tax credit to $3,000 or $3,600 per child for most families and have 50% of it paid in advance by th…
March 6, 2021
Senate Passes Bill with More "Targeted" Stimulus Payments
Coronavirus and Your Money

Senate Passes Bill with More "Targeted" Stimulus Payments

The Senate finally passes the $1.9 trillion COVID-relief bill. But fewer people will get a third stimulus check under the Senate version than under th…
March 6, 2021
Your Guide to Roth Conversions
Special Report
Tax Breaks

Your Guide to Roth Conversions

A Kiplinger Special Report
February 25, 2021

Recommended

How to Keep Tabs on Your Credit Report
Coronavirus and Your Money

How to Keep Tabs on Your Credit Report

Free weekly access is ending, but several services let you view your credit files more than once a year.
March 5, 2021
The IRS Can Take Your Recovery Rebate Credit for Child Support or Other Debts Owed
Coronavirus and Your Money

The IRS Can Take Your Recovery Rebate Credit for Child Support or Other Debts Owed

Restrictions put in place to protect your stimulus check from garnishment don't apply to "recovery rebate" tax credits.
January 30, 2021
Refer a Friend to Your Bank or Credit Card—and Reap Rewards
Making Your Money Last

Refer a Friend to Your Bank or Credit Card—and Reap Rewards

Some major card issuers are giving referral bonuses to eligible cardholders.
January 27, 2021
6 Money-Smart Ways to Spend Your Second Stimulus Check
Coronavirus and Your Money

6 Money-Smart Ways to Spend Your Second Stimulus Check

If you don't have to use your second stimulus check for basic necessities, consider putting the money to work for you. You'll thank yourself later.
December 28, 2020