lynnejoel1015

I meant to post this when we got back from our trip in September, but forgot, so here goes:

DH and I flew into Chicago for his sister's wedding. We go to Hertz at ORD to rent a car for the weekend. He hands the counter agent his debit card to pay and the agent says that he'll "need to run a credit check" on us to rent us the car.

I thought this sounded suspicious and absurd. I've never encountered that sort of thing before when renting a vehicle or in any other travel arrangements. Have you? Why on earth would Hertz need to check our credit?

We were paying with a debit card issued by a national bank with a Visa symbol on it.

I was really irked. What gives?

toedtoes

That's standard practice. Rental car companies want a credit card for guarantee purposes. You can pay for the car upon return with the debit card, but you can't use it as a "guarantee" of payment. It's stated on every car rental website.

The logic is:

With a debit card, they cannot "hold funds" until you return the vehicle. During the weekend, you could withdraw all the money out of the account, drop the car off at their lot and walk away and they can't get their money.

With a credit card, they put a "hold" on the appropriate funds (which are more than what the rental price actually is - I think double), so that the money is guaranteed to be there at the end of the rental period.

NeoPatrick

It seems to me that just a couple of years ago, you could not even rent a car if all you had was a debit card -- many agencies required a credit card instead.

While no system is foolproof, I beleive it's possible for someone to open a new checking account with $25 and get a debit card, even if he has no credit otherwise. So showing a debit card does not show that there is any means of being able to pay for the rental.

LoveItaly

Neo, your thoughts are correct. I have a college age grandson as you know. He has a checking a/c and an ATM/Debit card. A few days before payday he is probably down to $50.00 in his checking a/c. I also thought one had to present a credit card to rent a car but maybe the rules have changed.

Judy24

I was also under the impression that you could not rent a car with a debit card. So I would think that the OP was lucky that Hertz agreed to take their debit card in the first place.

Although I'm not real clear on the concept of running a credit check in this case. First of all, doesn't it cost money (and time) to run one, and furthermore, how does that show that you really have funds in your checking account? You know the old saying about 'past performance is no guarantee of future action.' My guess is they would have to somehow put a hold on some portion of the checking account (sort of like a certified check).

caribtraveler

Exactly what toedtoes said.
During one of our trips (Mexico), the Hertz rental agency had to call my credit card company for approval after CC company wouldn't let the "guarantee" go through (random security check on the part of my CC). That's how I realized that rental car companies actually block a certain amount on CCs.
I'm really surprised you were able to pick up a car with a debit card.

caribtraveler

Just to be clear about Mexico. This happened when we were picking up the car, not when we were returning it and paying the bill.
And fyi:
http://www2.hertz.com/company/faq/fa...ategory=ires#1

lynnejoel1015

Aha, thank you for clarification. They had no printed materials to show us that this was the policy. Seemed crazy to me. The way my debit card works is that it's also a Visa card, and can be used just like a credit card. I've always operated under the assumption that debit cards with the Visa / MasterCard symbol on them were treated just like CC's.

It was frustrating to be told we were having a "credit check" run on us and not be shown any kind of materials that stated this was in fact, policy.

Thanks, all. I'm glad we weren't victims of some kind of fraud.

LoveItaly

Hi lynnejoel, when you say your debit card has the Visa symbol and acts like a credit card..I have a question for you.

When you use your ATM/Debit card that has the Visa symbol to pay for a purchase (be it a restaurant bill, a purchase at a store etc) isn't the amount deducted from your checking account just like the amount is deducted from your checking account when you take money from an ATM using the same card?

I don't believe when you use the debit portion of this card that you receive a statement within a month that you must then pay as one would when you using a credit card. Am I correct?

I ask as it seems some people think because their ATM/Debit card has a Visa or MasterCard symbol on it that it is a credit card. A credit card is when you charge an expense and within the month receive a statement from the credit card company and have something within 20 or so days to pay the credit card company.

katybird

I have used my debit card with the Visa symbol at hotels, etc as a credit card. I know the money is debited from my checking but does the merchant have some way of knowing this is really a debit not a credit card?
Did you tell Hertz it was a debit card? I'm wondering if once they put a hold on the funds they could tell it was a debit card??
Confusing!

gail

When they run the card numbers, there is a way to see it is a debit versus credit card - so they do know.

While the credit check thing is a new one to me, I am seeing more signs at places - my local gas station, hotels, etc. that say they put a "hold" on a certain amount on your card for a certain length of time if it is a debit cartd.

Merchants are charged a different amount if it is processed thru Visa as a "credit" card or with a PIN as a debit card. It still works as a debit cartd to you - it comes out of your account immediately, you never get a bill, and you can not carry a balance - so symbols and names aside, it is always a debit card. (One good thing is, at least with our Bank of America Visa, we get same credit card protection against fraud, etc. as with regular credit card - that did not used to be the case with debit cards)

LoveItaly

There was a warning in the SF Chronical some months ago about holds being put on debit cards at gas stations. At that time evidently there were not any warning notices for the customer to see and consequently due to the holds for 3 to 4 days some people on tight budgets got overdrawn on their checking accounts. I don't know if our local gas stations have warning notices now or not but they should.

toedtoes

Those "holds" aren't really holds and have always been there when you use the debit card as a credit card. Basically, they electronically submit the amount to the bank at the time the card is swiped and the bank freezes that exact amount and begins the process to transfer the funds, which may take a couple days.

With Wamu, if I call and check my balance right after I make a debit as credit purchase, I will be told "your available balance is $439.32 and your current balance is $479.32. That lets me know that a debit as credit transaction for $50 is still in progress.

RedRock

Blame it on the debit card transaction. You need a good credit card and then you will have little or no problem. There are a different set of rules that apply when you use a debit card.

http://www.pirg.org/consumer/banks/d...rds1.htm#block

http://www.nacsonline.com/NACS/Resou..._factsheet.htm

lynnejoel1015

I totally understand the difference between a credit card and debit card (have plenty of credit cards... but we prefer to pay with the debit card - same as cash kind of thing to us).

When I opened up my BofA bank account in 2001, I was told that the debit card also works as a credit card. So sometimes institutions will say "credit card only" and my BofA Visa debit card works just fine (it works on their end and I don't have to mess with PIN numbers and on my end it deducts from my checking account just like cash).

I really just don't get why anyone would need to run a "credit check" on us before renting a car. Shouldn't they be able to tell if you have insufficient funds when they swipe the card?

Honestly, what difference does it make to Hertz whether my credit score is 800 or 600? As long as the transaction goes through?

We have excellent credit, and I'm just a private kind of person and don't like Joe Schmoe at the counter getting my credit info, ya know?

Anywho, I thought I was over it, but it still irks me, apparently

LoveItaly

Hi lynnejoel, perhaps it is an insurance type of requirement. People that charge their car rental with their credit card perhaps insurance statistic wise cause less problems for rental car companies than people that use their debit card..most probably use their debit card because they do not have a credit card unlike you and consequently are typically less financially stable?

In the future I would use one of your credit cards. When the credit card statement is received pay it in full before the due date. You will consequently not pay any finance charges so that is paying "cash".
And you won't go through the aggreviation of having the rental car company run a credit check on you.

I know a few people that deduct each and every credit charge from their checking account book..they consequently know for sure they have enough money in their checking account to pay their credit card statement in full when it is received.

ipod_robbie

Good grief. You have gotten many valid explanations of why this happens, and yet you're still irked. What gives? You always had the option of reserving the car with a real credit card and paying with your debit card.

If anything, you should be irked at yourself for not knowing how the debit card system works but rather relying on a long ago stament "BofA bank account in 2001, I was told that the debit card also works as a credit card.".

Ackislander

I share ipod robbie's frustration. You can't routinely rent a car with a debit card for all the reasons given, though you can pay for one when you return.

Toedtoes gave the right answer in the first reply.

All the discussion about what a debit card is and isn't and logos and not logos is wasted bandwidth.

joan

As a merchant, the visa/mc logo on a debit card allows me to process that card along with all the other credit cards, UNLIKE an ATM card. I believe that's the reason they started putting Visa logos on what is really an ATM card - gives Visa/MC a part of the action. It never actually works like a credit card though, except that if there's no pin pad, then the charge takes one extra day to process.

The reason they check your credit is because they never know how much your bill will really be (extra gas, extra days, accidents), and need to make sure you're good for the money.

Next time do as suggested here: reserve with a CC, then pay with the Debit Card (can only be done if pickup and dropoff locations are the same).

RedRock

A debit card cannot be used as a credit card. No matter how used the cash comes out of your bank account. With a credit card you are will receive a statement.

When you are ask debit or credit when using a debit card you are selecting how the transaction is going to be processed, its still a debit transaction.

Say debit and it is processed thru the ATM network and a pin is required.

Say credit and it is processed thru the Visa network, no pin.