Why do car rental companies put a hold on debit cards?

For car-rental companies, though, the customer is driving away with the merchandise, and, unlike a TV, the customer is expected to return it.





Most of the major rental companies require a credit card to initiate the rental, even if a debit card will be used to make payment upon return of the car. And most companies will accept only a co-branded Discover, Visa or MasterCard debit card.





Those companies that do allow a rental with a debit card often put an authorization hold on the debit card during the rental, usually between $300 and $500. Yes, the unused funds will be returned to your account after you return the car, but it might take up to two weeks for the funds to be released back to your account.





Credit cards also have authorization or holding fees. When you use a credit card to rent a car, the estimated amount of the rental will be put on the card but the transaction is not put through, thus the term ';holding'; fee.





When you return the car and keep the charges on that credit card, the transaction is processed. If you choose to pay with a different card or a debit card, the transaction on the first card is canceled and put on the debit or other credit card. However, it may take time for that hold or authorization on the first credit card to be removed. If you change form of payment, be sure to ask the car rental companyWhy do car rental companies put a hold on debit cards?
This may be the case, but requiring a hold on a debit card equates to economic discrimination. Case in point, when you use a credit card, they only hold the amount of the rental. Use a debit card, they want the cost of the rental and additional funding. Fair... NO!!

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Why do car rental companies put a hold on debit cards?
They put a hold on a set amount of money on the debit card. This is to substitute for a credit card with the same dollar limit as the hold they put on the debit card.





They will tell how much the hold is. Just ask.





Feel free to contact me with any additional questions you might have.





Chris C


Real Estate Broker/Lender
Turn around the situation and you will understand. Your own car. Have a total stranger come to your door and say can I rent your I only need it for a day, what would you do. Car rental companies don't know you from a hole in the wall. Your taking their car and going who knows where and keeping it who knows how long. It's no different then renting a apartment. We recommed to our clients that a deposit be charged to a debit card or credit card as well as the estimated charges. It's a small security deposit compaired to the lilability they have. At least with apartments they don't move. With a debit cars they don't have the luxuary of having access to your credit report through the credit card company. Anyone today can walk into a place and get a pre paid debit card with their name on it.
As insurance, in case you crash or steal the car.
Rentals are paid by time used,if your late,you pay...the hold is like opening a temporary account with the rental agency
Rental car companies have a huge liability allowing someone to rent their car. There are many legal issues to take money directly from your bank account. They put a hold on your account to ensure funds are available so they can collect any owed monies. With a Credit card, they can bill the card company and it would be the responsibility of the Credit Card company to come after you. I hope that helps.