The holiday season is upon us and many of us will be taking time off work to visit family and friends or just to get out of town. With so many people going on vacations, the number of cars being rented increases dramatically. Unless you’re planning a staycation, it’s likely that you will need a vehicle or some reliable means of transportation once you get to your holiday destination. That is usually where rental cars come in handy.
Renting a car during your vacation has its advantages and it’s also fun driving a “new” car. It can also be quite convenient and oftentimes more affordable than relying on taxis, while saving you time and headache. The advantages aside, it’s important to note that if you plan on renting a car using a debit card, you should know how it can affect your credit.
Rental car companies prefer that their customers use a credit card. As Thrifty Rental Car explains on its site, “Renting a car to someone with no credit card is risky for rental car companies. Not having a credit card is a red flag that you may be a credit risk.”
Because of this, it is much easier to use a credit card to rent a car than a debit card. That being said, not everyone has a credit card and their only option is to use debit for payment. That can be fine; however, you should be aware of what that can entail. If your reason for not having a credit card to use is because of poor credit, this is even more important.
Using a Debit Card for Car Rentals
Many car rental companies will allow you to use a debit card for your rental but they don’t make it easy. When using a debit card, the rental companies will usually require you to have the full amount of the scheduled rental charge available in your account and may also put a hold of up to $350 on your account. Additionally – and what you really need to worry about – they may also run your credit.
Some rental companies will check your credit score before approving the rental while others will look for multiple delinquent lines of credit opened within the last 3 years. Each time they run your credit, it can lower your FICO score by 5 or more points. If your credit score is already low, this will not only make it worse but you could also be declined. After being declined at a rental company, many people will just try getting a rental from another company and then their credit will be checked again by the next company, lowering their score even further.
If you think your credit score may be too low (a score lower than 500 can be risky), then you should seek alternative options. At the very least, you should contact the rental company that you plan on using and ask about their credit requirements to determine how strict they are before having your credit ran.
Alternatively, you could look for a rental company that won’t run your credit, although they may have other stipulations. According to CreditCards.com, here is a list of rental companies that check your credit when using a debit card and those that don’t:
Companies that run a credit check
Companies that do not run a credit check
- EZ Rental
The companies that do not run credit checks may not allow you to use a debit card so you may want to contact them first before making plans.
If you don’t have a credit card and don’t want to risk damaging your credit, the best route to take would be to find an alternative means of transportation, such as:
- Uber, Lyft or other ride share service
- Taxis or limo service
- Public transportation
While these options may not be as convenient, they could help prevent serious damage to your credit that could haunt you down the road. If your credit score is low and you need assistance improving your credit score, contact Credit Absolute today for a free consultation: (480) 478-4304