Renting a car with debit card or cash? Expect to try harder
Debit, cash accepted, reluctantly, at auto rental agencies, survey finds
By Steve Holt and Connie Prater
Thought you couldn't get a rental car if you didn't have a credit card? That's probably what you've heard for years from rental car agents at airports, but it may be getting easier for some travelers to rent a car without a credit card. A CreditCards.com survey of the top rental car companies indicates that nearly all of the companies allow you to rent their vehicles without credit cards. However, it may take some work on your part -- and patience -- to get the vehicles.
If you don't have a credit card or have one and don't want to use it, debit card transactions are now more widely accepted by rental car companies. (See 12 tips for renting a car without a credit card ) Unlike credit cards, which require users to borrow money from credit card issuers to pay for purchases, debit cards draw funds from the user's own checking or savings account. Debit transactions are limited to how much cash is available in those accounts and banks may impose daily limits on the amount of transactions processed with these cards.
The CreditCards.com survey includes nine major car rental companies: Alamo, Avis, Budget, Enterprise, E-Z Rent A Car, Hertz, National, Rent-a-Wreck and Thrifty. A total of 45 locations were surveyed. CreditCards.com called five different locations of the same rental company -- some at airport sites; others away from the airports in cities -- to ask if they allowed customers to rent vehicles without credit cards. The first response was often a curt "no" from many of the customer service representatives working the desks. That answer quickly turned to "yes," however, when a follow-up question was asked: Do they accept debit cards?
Answers vary; call around
The answers varied from one location to another, largely because the majority of auto rental agencies are franchise operations allowed to set local policies about payment acceptance. So a credit-cardless customer who is turned away by a car rental agent at an airport site may be accepted at another location of the same company. It pays for consumers to call around. The manager at one rental car agency may agree to relax the requirements to accommodate a frequent customer or if they want to make a sale and the only way to do so is to accept a nontraditional payment method.
Of the 45 rental locations contacted, all eventually indicated they accept debit cards -- meaning credit cards are not required. The companies prefer customers use credit cards, however, and impose a variety of additional hurdles and restrictions for those paying with debit cards or cash.
Debit card use rising
Wider acceptance of debit cards by the auto rental companies has coincided with increased use of the cards by consumers. A December 2007 report by the Federal
Reserve Board shows that debit card payments outnumbered credit card payments by 2006 and became the most frequently used type of electronic payment. From 2003 to 2006, debit card transactions rose by 17.5 percent to 25.3 billion payments; there were 21.7 billion credit card payments during that same period.
For years, major auto rental companies stood by policies to only accept credit cards for their vehicle rentals. As one rental car agency representative puts it: "It has something to do with the fact that they're giving you a $20,000 car, and we need a credit card to back it up."
According to the Federal Reserve's 2006 Survey of Consumer Finances, 75 percent of U.S. families had credit cards in 2004. However, some families may have reasons to use their credit cards more prudently these days. With mortgage foreclosures rising and debt mounting for many American families, a growing number of people may choose to pocket their plastic. Some people may be close to their credit limits and do not want to risk incurring over-the-limit fees charged by credit card issuers. Others may have been advised by credit counselors to shred their credit cards to remove the temptation of using them. Still others may simply prefer to conduct business in cash and not borrow to pay living expenses.
One car rental company spokesman said his company is more confident in debit card users today. Users are screened more closely by banks due to increased scrutiny of customers caused by laws passed after Sept. 11, says Jason Manelli, director of marketing and communications at Rent-a-Wreck of America.
"Post 9-11, banks are doing a better job of managing those who open checking accounts, from proof of residency to credit checks, etcetera," says Manelli, whose firm has rented cars to customers without credit cards for at least 15 years. "With what the banks have done, we feel good about accepting debit cards, and it gives us a better qualified customer. When we rent a car for cash, we don't really have anything to connect us to our customer when he drives that car off our lot."
More limits, restrictions, scrutiny
The CreditCards.com survey reveals that while the companies allow debit card rentals and payments, many have restrictions and additional requirements for those not paying with credit cards.
Additional documents may include any of the following:
- Credit checks.
- Valid driver's license or U.S. passport.
- Recent (within the past 60 days) utility bill (i.e. telephone, gas, cellphone).
- Copy of return airline ticket or e-ticket itinerary.
Additional requirements and restrictions may include:
- A ban on in-state residents, leaving the rentals only to out-of-state travelers.
- Exclusion of luxury and large SUV cars.
- A prohibition on drivers under 25 years of age, or additional daily fees for young renters.
- Extra deposits and other fees.