My wife and I have chosen to be debt free and live without the use of credit cards. 99% of the time we have no issues when it comes to purchases. We simply swipe our debit card or pay with cash when making a transaction. The one instance where we’ve had difficulty is when we are renting a car with a debit card.
We’ve run into trouble twice with this and in both cases it nearly had us stuck. The most recent time, on our vacation to Yellowstone a few weeks ago, nearly cost us our trip.
My wife is an incredible trip planner. She can research and organize a trip with such precision I hardly have to pay attention. The most I end up doing in the trip-planning phase is giving minor advice and approval to her vacation to-do requests.
So when the chance came to save $700 on our rental car for the week that was a no-brainer. “Heck, yeah” I said. “Book that!”
My wife is member of the AICPA (the American Institute of CPAs). As a member she is entitled to discounts with companies with whom the AICPA has an affiliation. One such company is Hertz.
She did all the fine-print reading ahead of time and found out Hertz does accept debit cards for rental car purchases. The one caveat is they require a credit check before releasing the car. That should have raised a red flag for us but we just missed it. (Our credit is of course shot because we don’t use credit anymore.)
So we booked a minivan with Hertz two months prior to leaving and didn’t give it another thought.
Renting a Car With a Debit Card: A Nightmare Scenario
“Sorry ma’am…I can’t release the car to you.”
Those are not the words you want to hear at a rental car counter period, let alone one in Cody, Wyoming at 9:00 pm at night on the first day of your vacation. No offense to Cody but it’s not quite like Atlanta. Your options are a bit limited.
The Hertz agent was reacting to information spit out by his computer system when he ran my wife’s credit check. Evidently it came back with a resounding, “No! Don’t rent to these people…they are a terrible risk!”
An attempt to run my debit card through the system (which I knew would be futile) resulted in the same automaton response from the agent.
“No car for you!”
“What are we going to do?” my wife asked him. “We have a week’s vacation lined up. How are we going to get around?
No joke…he literally reached over and handed me a business card for a cab service.
He proceeded to tell us there was nothing he could do – that all rental car companies have this policy. It’s standard throughout the industry. Giving me a waiving motion with his hand he defensively said, “You go anywhere – try next door to the other rental car companies – and you’ll find they do this exact same thing.”
Now, I don’t like being in a desperate situation but I like being lied to even less. So I calmly but firmly shot back.
“No they don’t,” I said. “I’ve rented cars using my debit card before and all they do is put a hold on a certain amount of funds from your checking account. Don’t tell me it’s standard policy…It’s your company policy.”
“Well I’m not going to release the car to you sir. If I do I’ll be SOL. There’s nothing I can do.”
“So what are we going to do?” my wife said for the third or fourth time in the conversation, her voice cracking with fear as our unaware kids tumbled around in the background with the luggage.
At that point we only had three options in increasing level of severity:
1) Hope the only other rental car services open in the airport – Budget or Avis – would give us the option of renting a car with a debit card.
2) Call the cab service and have them drive us to the nearest big city where we might have more rental car options.
3) Book a flight back home and cancel/postpone our vacation.
Of course we chose option one but with great fear we might be headed to options two or three. So with great nervousness we stepped up to the Avis rental car counter.
At this point there is no need to go into details about what has just happened or the desperation of our situation. The Avis counter is right next to the Hertz counter so the Avis agent has heard the whole conversation. It’s not as though he’s been helping dozens of other passengers because the Cody airport is hopping at 9:00 pm on a Friday night.
I simply asked him one question…
“Can we rent a car from you using our debit card?”
“Sure” he said. “We do that. I don’t know what that other agent was talking about. Our policy is that we put a $200 hold on your checking account. Let me run your information through our system and see what I can do for you.”
Relieved, I looked over at my wife. I reached out to grab her trembling hands. We were going to be OK.
Ten minutes later he had booked us in a Toyota Sequoia – a little bit tighter fit with our luggage than the minivan we had hoped for but I wasn’t complaining. He even reduced the rate on the vehicle, even though we ended up paying four times as much as we had planned because Avis does not have an affiliation with the AICPA.
I wasn’t complaining about that either. We were just thankful to be on our way. Thank you Avis and the agent at the Cody, Wyoming airport.
Why Rental Car Companies Require a Credit Card
You may be wondering why rental car companies require a credit card in the first place. For them it’s all about security and recouping losses due to damage or theft of the vehicle.
For example, if I rent a car using my debit card then the rental company is limited in the amount of funds they can recoup based on the amount of money in my checking account. That amount could be $10,000 or it may be $500. In the first case they could get to a lot….in the second, hardly any. There would be insufficient funds to compensate them for a vehicle loss or damage. They don’t want to take the risk that I have little to no funds in my account.
With a credit card they are able to go after a higher amount. Each user has a credit limit up to which they can spend, usually in the thousands of dollars. That limit represents a greater portion of secured funds the rental car company could go after. It’s less of a risk and they’ll have a greater likelihood of tracking you down and getting the funds they need.
In short, they will be getting paid no matter when – or in what condition – you return the car.
What to Do Before Renting a Car With a Debit Card
If you plan on renting a car with a debit card the biggest piece of advice I can give is to call ahead. Don’t take the word of any company policy you read on the Internet. Call the company you wish to book with in advance and get clarification on how to do it and what they require.
Don’t let anyone ever tell you that all rental car companies require a credit card. It’s simply not true. But realize some do and they will not budge on their policy. Enterprise and Hertz are the two companies I’ve had issues with so avoid them if you are using a debit card.
I know some credit card enthusiasts will jump in and say, “See this is why you need a credit card…for these type of emergencies.” I get that. And believe me, in that moment when we realized our mistake I wished I could have pulled one out and handed it to the agent.
However, until the entire industry makes it a standard policy I’m not going to change my “no credit card” lifestyle. I still have options for renting a car with a debit card. I just didn’t plan very well. So that’s on me, especially since this had happened to me once before.
But I’ll tell you this…I’ll never let that happen again. The stakes of being stranded or ruining a vacation are too high.
Questions: Have you ever had trouble renting a car with a debit card? Ever been stuck at a rental car counter, unable to get a car? What other companies besides Avis do you know allow a debit card to be used to rent a car?