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Most Americans have at least one credit card, and there are many benefits to having one. Some credit cards offer cash back in certain categories, while others help you earn rewards for travel purchases, like airline tickets. Speaking of travel, you typically need a credit card to reserve a rental car.
Does that mean it's impossible to rent a car without owning a credit card? The short answer is: no, you can rent a car without a credit card. However, it's certainly more difficult to rent a car without one. But if you want to rent a car and you don't have a credit card, here are the steps you will need to take.
First, you will need to look into rental car companies that do not require a credit card for vehicle reservations. The good news is, most major rental car companies don't require you to present a credit card at the counter. Here are a few of the most popular companies that don't require credit cards:
Before you book a reservation, it's still a good idea to double check that the rental company you want to use does not require a credit card (and accepts a form of payment you do have, like a debit card). Every rental car company has different payment rules, which can vary based on your state, your age, and the car you choose.
When you don't have a credit card, you might be limited in the types of cars you can rent. For example, high-end sports cars and even luxury SUVs might be off the table if you can only pay with a debit card. Because the rental company can't secure a deposit without a credit card, there's more risk in letting you borrow an expensive car.
Fortunately, vehicles in the "economy" category (like compacts and sedans) are usually available to rent without a credit card. These cars are also the cheapest and often have the best gas mileage, so it can help you save some money if you're traveling on a budget.
Chances are, if you are renting a car without a credit card, the rental car company will want to check your credit. Although your credit score and your driving record are not exactly linked, your credit score can give the rental company some indication of how responsible you are. If your credit history shows a streak of unpaid bills or overdrawn accounts, for example, it could indicate that you are a risky customer.
To put it simply, rental car companies trust you to take care of their vehicle and return it safely. But they also know that accidents happen. As a result, the rental company wants to be assured that if something does happen to the car -- and you are responsible -- you can afford to pay for the damages.
If you are renting a car with a debit card or cash, you can't put down a traditional deposit. However, that does not mean you will be exempt from a deposit. The rental car company may ask you to put down a deposit using another source of funds, such as a cashier's check, personal check, or money order. Upon returning the vehicle, you will get the deposit back, assuming that there is no damage and you did not exceed your rental time limit.
If you're wondering why most rental car companies require (or prefer) credit cards, there are a few reasons.
When you book a rental car with a credit card, the rental company takes a deposit. That money essentially gets frozen until the reservation ends. If something happens to the car during the rental period, the company can easily get that money back; the deposit becomes a charge that goes on your monthly credit card statement.
However, you can't put down a deposit with a debit card in the same way. It would require the rental company to withdraw the money upfront, then reimburse you later after you bring back the car. More importantly, if there are insufficient funds in your debit account, the rental company can't retrieve any money if you damage the car.
Ultimately, it's less risky for rental car companies to lend vehicles to customers with a credit card, given that the deposit can be easily retrieved. When you use a debit card, there are often more hoops to jump through because the rental company wants to make sure you can cover any potential damages. Otherwise, the rental company might end up paying for it.
It's always a good idea to book a rental car with a credit card if you have the option. Using a credit card can give you access to a wider variety of cars, it may help you avoid unnecessary credit checks, and it makes the deposit process much easier.
Using a credit card to book a rental car can also help you earn rewards if you have a credit card with travel perks, which can also be redeemed for discounted or free rental cars once you have enough points.
Many rental car companies will accept cash when you make the final transaction, which occurs after you return the car and your reservation ends. However, you cannot make a deposit at the beginning of your reservation using cash. If you don't have a credit card, you will need to make a deposit using another payment method.
When it comes to renting a car, using a prepaid card is like using a debit card. You most likely can't use a prepaid card to put down a deposit for your reservation, even if you have sufficient funds in the account. However, you are allowed to use a prepaid card to pay for your reservation when you return the car.
It's very unlikely that a rental company will let you borrow a vehicle without making a deposit first. Your deposit is the rental company's financial safety net.
If you have no way of putting down a deposit, the rental company will not allow you to take the vehicle.
Some rental car companies have cheaper rates than others, but it's difficult to determine which company is the most affordable. The cost of a rental car depends on a variety of factors besides the company you pick, including the type of car, the length of the rental, and what type of insurance you choose.
You can typically get price quotes online from the biggest rental car companies, which can help you find the cheapest option.