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Hazards of Renting a Car with No Credit Card

Dec. 29, 2014
Credit Cards
Hazards of Renting a Car with No Credit Card
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If you don’t have a credit card, it’s possible to rent a car with a debit card or even with cash. However, there are challenges and risks involved.

Why you’re seen as a risk to a rental company

Cash rentals are riskier for car rental agencies because it can be difficult or impossible for them to recoup losses in the event of stolen or damaged vehicles. Your personal insurance policy may offer some protection, but the major credit card networks offer secondary insurance that can supplement your personal coverage. Without a credit card, you will be viewed as a high risk.

Lacking a credit card, you may have better luck with smaller rental companies that accept customers who use cash or a debit card.

You’ll have a high cash deposit

When renting a car with cash or a debit card, you’ll probably have to fork over a deposit. In addition, you’ll be asked to show proof of identity, including your address, place of employment, insurance carrier and a verifiable phone number.

Using a debit card can affect your credit score

Be careful if you use a debit card to rent a vehicle. Since you’re not using a credit card, a rental company may check your credit. But every time your credit is checked, your score is dinged. 

A hold on your bank account

The rental company will also likely put a hold on the bank account linked to your debit card. The hold on an agreed-upon sum could extend 14 days or longer. This will block your ability to access money in your account — beyond the cost of the rental — until the hold is released. Make sure you understand how much money will be put on hold and for how long.

You’ll have fewer options without a credit card

You probably won’t be able to find the best rental rates, and you’ll have a limited vehicle selection if you rent without a credit card. You’ll also have fewer rental companies to choose from.

You may have to pre-qualify and pre-register

Bigger rental companies that allow cash deposits may require you to pre-qualify or pre-register up to six weeks before you rent the car. This means you’ll need to plan ahead instead of renting on the fly.

When you absolutely must have a credit card

You may run into a rental company that requires customers to have a credit card before they’ll do business with you. Also, some companies will let you to pay in cash as long as you have a credit card to cover the security deposit.

There are credit cards for people with no credit called secured credit cards. With a secured card, you put down a cash deposit, which gives you credit up to the amount in your deposit. Try to find a low-interest, no-fee secured card within a major network.

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