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

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.

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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.