"Credit Check" when renting a car???!?!
 

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 <b>Hertz</b> 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 &quot;need to run a credit check&quot; 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. :-L What gives?

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 &quot;guarantee&quot; of payment. It's stated on every car rental website.

The logic is:

With a debit card, they cannot &quot;hold funds&quot; 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 &quot;hold&quot; 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.

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.

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.

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).

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 &quot;guarantee&quot; 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.

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

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 &quot;credit check&quot; 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.

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.

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!

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 &quot;hold&quot; 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 &quot;credit&quot; 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)

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.

Those &quot;holds&quot; 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 &quot;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.

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

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 &quot;credit card only&quot; 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 &quot;credit check&quot; 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 :@

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 &quot;cash&quot;.
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.

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 &quot;BofA bank account in 2001, I was told that the debit card also works as a credit card.&quot;.

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.

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).

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.

The only thing I use a debit card for is to get cash from a machine.

I've never understood any real advantage of using a debit card for purchases. I always pay off my credit card in full, so when I charge something it may be up to 5 or 6 weeks before I have to pay for it at absolutely no additional cost to me. Why do people want to &quot;lose&quot; their cash from their checking accounts immediately when someone else will &quot;fund&quot; you for free for a month or more -- and give you FF miles or other advantages to boot? (Although I guess some debit cards will also give you that last benefit, too).

NeoPatrick, some of us aren't so good at budgeting so if we use the debit card the money shows as &quot;gone&quot; in our accounts. If we use the credit card, we might forget about the purchase and accidentally overspend that month. Nothing is worse than getting a much higher credit card bill than you were expecting because you forgot about some purchases!

I agree with NeoPatrick -- that's the way I do it, but I have the funds to take care of the balance once the bill arrives.

Monica makes a good point also. Some can't seem to manage their charging as well as others, and it might be better to pay as you go. There's no one shoe to fit all. ((b))

One way to never overspend when you use a credit card is make sure the cash is in the bank before you make a purchase. In other words use the credit card as others use a debit card. By looking at it this way you can pay the bill in full when it comes in and no harm done. Why not get the 5% cash back, air miles or what ever is offered. Its free.

Husband and I are both very good at &quot;managing our charging&quot; - but with joint checking account, debit card works best for us. That way I don't have to manage his charging or he mine - on-line banking lets us know the balance and avoid situations where he buys an expensive suit and I buy yet some more shoes in the same month.

And since savings, retirement, payment to son's college and mortgage - all the big things - disappear automatically from our account, it is nice to be able to see exactly what is left before the fact, rather than when credit card bill arrives.

I only use my credit card for car rentals and emergencies. Everything else is paid in cash (usually via debit cards). I like the control it gives me. If I have the money in the account, I buy it. If I don't, I don't. I also don't put all my paycheck into the checking account at once. I move it in stages so that I have to think before I buy something unplanned.

I have found that I buy a lot less now than when I used my credit cards, but what I do buy I really really am happy with.

OK, I guess I now understand why some people like the debit cards -- it just doesn't make sense to me.

I guess if you are unable to figure out that you can't charge more than you have in your checking account, then having somebody tell you each time is a good idea. in other words if you use a debit card they'll tell you that you can't buy anything more and deny the purchase, but with a credit card you'd actually have to figure that out for yourself. Using a credit card and NOT spending more than you can afford does require a little common sense.

Gee, Patrick, that sounds a bit patronizing. I have eliminated credit cards and my husband and I recently made a switch to no credit cards in an effort to simplify, not because we don't have enough common sense to manage our money. My time is money, as I currently run two businesses. Not having to worry about statements and bills for my personal or business spending makes things easier all the way around. For both personal and business we use debit cards with miles. Everything is on one statement, easily exported to Quickbooks. My bookkeeper is happier and I have an instant and immediate handle on what is going where. It has nothing to do with spending until the card is denied or not being able to budget funds.

As for renting cars with debit cards I have done it several times with no problem or credit check. I do have a real VISA tucked into my wallet, but I've not had to break it out since we went &quot;no credit.&quot; My bank account always has sufficient funds to cover the $250 - 300 withdrawal from the account when renting a car. When I am in L.A. I rent from Fox Rentals and they gladly accept debit cards with a return ticket. I have also recently rented from Budget, arriving late at night in San Diego and renting at the airport location. No problems, no credit check. But I do understand that not all locations will accept the debit card as a deposit. Heck, some Enterprise locations even accept a cash deposit when renting.

we're in our late twenties and are still climbing out of credit card debt leftover from our early 20's, so now that we're on track, we don't spend money we don't have- pay cash (debit) for everything unless it's an emergency or a really big purchase.

None of our credit cards have fancy perks like miles-- we're waiting to sign up for those once we're 100% debt free (and we're also working on college loans repayments).

So since we can't just pay off the credit card bills in full each month yet, we avoid using when possible.

here today, then I certainly wasn't talking about you -- you offer some reasons valid for you. Perhaps my post was &quot;patronizing&quot; but I'm sorry I just don't &quot;get&quot; someone saying, &quot;if I go shopping with a debit card and there's only $500 in my checking account then I know that's all I can spend, but if I have only $500 in my checking account, I'm unable to figure out that with a credit card I still have to limit my purchases to that same amount. But I do realize that if a person is unable to control spending only the amount of money they have, then perhaps the debit card IS a good idea. But I do understand it. It's not unlike an alcoholic who can't stop with one drink. I can. Some can't control their spending and need help also.

Another thing to consider. Some can not get or no longer can get a credit card for one reason or another.... Their only option is the debit card or carry a wad of cash. I will not carry the debit card. Don't like the &quot;credit&quot; feature offered with no pin required being attached to my bank account. I like the buffer a credit card provides since an unauthorized transaction is only against a credit line. I will use the old ATM card because of the pin requirement.

Neo - I think you meant me.

I have never had to have my card denied to know when I was short on money. I am quite capable of knowing when my account is low. I simply find that I am much more aware of what I'm spending my money on when I &quot;see it&quot; getting deducted out of my account as I go (especially since I don't keep a huge amount in my checking account).

I did the credit cards before (paying in full each month), and I never saw much of a benefit and it was harder to remember what I'd spent and when until that statement came. And of course, they all have a different due date that never seems to correspond with payday.

And, by using just debit and cash, that's one less bill I have to pay next month. I hate paying for dinner 3 weeks after I ate it.

I have a VISA/Debit/ATM card. I disabled the VISA portion of the card because if lost, someone could empty out my checking account using the VISA portion without having to use a PIN. Also, when the VISA was activated, I used it in a couple of places where the charges were accidently run thru the machine twice. While I eventually got the duplicated debited charges from my checking account back, it was a pain in the arse getting it done.

I understand BofA will immediately put the money back into your account once you report it, but my bank won't. I would have to write up a disputed charge report then get some bureaucrat to approve it.

Check with your local institution for their rules in this situation. ((b))

Then you have an ATM card. Why not refuse the Visa debit card entirely and just ask the financial institution for The ATM card, that is what I did. Its used only at an ATM. Never for point of sales transactions. I use my credit cards same as most use a debit card, you are doing this when you pay in full each billing cycle.

NeoPatrick - I am fairly good at math and my memory has not started to fade yet. But between bills paid from checking account, purchases and cash withdrawels, husband and I have perhaps 40-50 transactions per month from checking account.

My brain is filled with far more important things than keeping this running total in my mind, nor do I want my dinner conversation with my husband to be &quot;how much did you spend today on the credit card&quot; - so with a debit card I always know how much is in the account.

Could I do it with a credit card - sure - but this is easier for me.

Gail, forgive me, but I guess that's the point I don't get. I think one of the things I don't like about debit cards is that you need to remember every transaction and go home and record it in your check book, to make sure you don't overdraw before a monthly deposit is made or base it on the day of the month of an automatic payment from the checking account. With all your monthly numbers, I'd think that would drive ME crazy, keeping track of the timing of it all.
Plus, I don't get why you'd have to remember to tell your husband how much you spent on the credit cards today, but you don't have to remember how much you spent on your debit cards. What's the difference? Assuming you have a computer you can also check either one anytime on line if you really forget.

Some people do things one way, and some people do things the other way. That's what makes the world go round. ((b))

&quot;Some people do things one way, and some people do things the other way. That's what makes the world go round.&quot;

That's really the point that some people on Fodors don't seem to get. I'm often amazed at how far some people will go to try to convince others that their position is the one and only logical way. To them, any other way just lacks common sense.

Also what some people don't &quot;get&quot; is that some of us are curious why people do things a certain way. I'm curious why people find it &quot;easier&quot; to use a debit card rather than a credit card. That's why I keep saying &quot;what am I missing?&quot; Several have explained reasons why debit cards work for them. Perhaps I'll learn somehing I've missed. Is that a bad thing?

I'm sorry, if my curiosity about why it is easier to remember what charges one makes on a debit card than it is to remember the charges one makes on a credit card. If such questions bother you, perhaps you should skip over them?

I'm not aware that I've made any attempt to convince people that &quot;my way is better&quot; if that's what some of you are implying.