No credit card? Renting a car with a debit card just got easier

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Most car rental companies have a long history of requiring their customers to use a credit card when reserving a car. Hiring a car with a debit card has always come with restrictions and additional fees. But thanks to the growing number of frugal customers who don’t have or don’t want to use credit cards, that’s finally changing.

Dollar Rent-a-Car has just announced its new Politics specifically aimed at making it easier than ever to book a car with a debit card. In a statement, the company said its new policy “will eliminate credit checks, reduce proof of return travel and identity requirements, while lowering the car rental age restriction from 25 to 20 years”. Thifty will offer the same policy. Hertz owns both companies.

Under the new policy, rentals booked more than 24 hours in advance will only require a debit card and driver’s license. Dollar also reduces the amount of the incidental withholding $ 350 at $ 200, plus rental cost, for debit card and credit card rentals. Rentals booked less than 24 hours in advance, or rentals of special vehicles, will require two forms of identification and proof of return travel plans.

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The bias against renting a car with a debit card

“Car rental companies tend to view debit card customers as riskier than those who pay by credit card,” writes Josh Barro of New York magazine‘s Intelligence. “They see the absence of a credit card as a warning sign of bad credit, and therefore believe that a tenant who wishes to pay with a debit card may be less trustworthy with expensive equipment like a car. They’re also worried that a debit card might be linked to an account that doesn’t have enough cash to cover unforeseen charges a customer might incur, such as a late return.

Credit cards offer car rental companies some protection in the worst-case scenario. If a debit card customer leaves at sunset with a rental, the Company’s recourse is limited to any instance available on the customer’s account. Do you have enough money in your debit account to cover the recovery and possibly the repair or even the replacement of a recent Ford Focus? Probably not. And you are not alone. With a credit card, the business is more likely to receive compensation for its loss or hardship.

Why is it changing

However, credit card politics have long inconvenienced a large part of customers, especially younger ones. Most car rental companies prohibit renting debit cards to customers under the age of 25, and many customers under the age of 25 are the ones who don’t have a credit card to begin with. Rental companies are also hitting these customers with additional fees, even if they book with a credit card, and credit checks are an issue that can ding your credit. Regardless, it is generally recommended to avoid using credit cards when possible.

“For over 27 years, I’ve been on the radio helping families earn with their money, including telling people to cut their credit cards and only use debit cards,” said Dave Ramsey, a financial advisor, in the Dollar release. “I also heard from many frustrated callers as they searched for a rental car company that would accept debit cards without much hassle.”

This new policy eliminates those headaches. It’s no secret that the customer most affected by the policy, customers in their early 20s, are among the most likely to use ridesharing services and other transportation options instead. Eliminating these debit card restrictions could make renting a more attractive and perhaps more affordable option for these customers when traveling. The big question is whether other companies will follow suit.

Readers, have you ever rented a car with a debit card? Will this policy make you more likely to rent? Comments below.

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