Why Car Rental Companies Insist on Credit Cards for Obtaining Reservations
If you have ever
rented a car, regardless
of how you planned to
pay for the actual
rental, the car rental
company probably asked
you for a major credit
card. It is standard
practice for most car
rental companies to
require their customers
to provide a major
credit card at the time
of rental.
Beyond simply asking for
your major credit card
information, most car
rental companies will
obtain a credit card
authorization and
advance charge approval
to cover expenses
related to any potential
damages to the car while
it is in your
possession. In essence,
your card is held as a
security deposit against
loss or damage.
If you turn back the car
in perfect condition,
nothing will be charged
to your card except for
the rental fee. However,
if the car is damaged
while it is in your
possession, your credit
card will immediately be
charged with an
appropriate fee based on
the terms of your rental
agreement.
The rental company will
not actually charge a
fee to your card at the
time you rent the car.
However, by obtaining an
advance charge approval,
the
rental car company
in essence reserves a
certain amount of room
on your card for charges
they might have to make
in the event the car is
damaged while in your
possession.
Keep in mind that all
plastic is not created
equal. When it comes to
renting a car, there is
a big difference between
a credit card and a
check card or debit
card. Many car rental
companies will not
accept check cards or
debit cards for rental
car security deposits.
Rental companies cannot
process advance charge
approvals against debit
or check cards, and so
do not accept such cards
for security deposit
payments.
Before letting you
complete the car rental
transaction, the rental
company will get
permission from you to
charge your card if
something does happen to
the car while you have
it. Additionally, the
rental car company will
verify that there is
sufficient room under
your credit limit cap on
the card to cover the
amount required for a
security deposit.
Also keep in mind that
car rental companies
wont just take any
credit card. When you
rent a car, you dont
need just any major
credit card. You need
your major credit card.
The person whose name
appears on the credit
card has to be listed as
an authorized driver on
the rental agreement and
the person has to be
present at the time the
car is rented. In other
words, you cant borrow
your friends credit
card to use for the
security deposit on a
rent a car.