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Rent a car for vacationThe holiday season is fast approaching and many of us will be taking time off from work to visit family and friends or simply get out of town. With so many people going on vacation, the number of rental cars increases significantly. Unless you’re planning a staycation, you’ll likely need a reliable vehicle or transportation once you arrive at your vacation destination. This is usually where rental cars come in handy.

Renting a car while on vacation has its benefits and it’s also fun to drive a “new” car. It can also be very convenient and often more affordable than relying on taxis, while saving you time and headaches. Benefits aside, it’s important to note that if you’re considering renting a car with a debit card, you need to know how it can affect your credit.

Car rental companies prefer their customers to use a credit card. As Thrifty Rental Car explains on its site: “Renting a car to someone without a credit card is risky for car rental companies. Not having a credit card is a red flag that you may be a credit risk.

For this reason, 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 the only option is to use debit to pay. This can be good; however, you should be aware of what this may entail. If the reason you don’t have a credit card to use is bad credit, this is even more important.

Using a debit card for car rental

Many rental car companies allow you to use a debit card for your rental, but they don’t make it easy. When you use a debit card, rental companies will generally require that you have the full amount of the scheduled rental charge in your account and may also hold up to $350 from your account. Plus – and what you need to worry about – they can also manage your credit.

Some rental companies will check your credit score before approving the rental, while others will look for multiple outstanding credit lines opened within the last 3 years. Every time they run your credit, it can lower your FICO score by 5 points or more. If your credit score is already low, not only will this make the situation worse, but your application could also be denied. After being turned down by one rental company, many people will simply try to get a rental from another company and then have their credit checked again by the next company, lowering their score even further.

If you think your credit score may be too low (a score below 500 can be risky), then you should look for alternative options. At the very least, you should contact the rental company you’re considering and ask about their credit requirements to determine how strict they are before you get your credit.

Alternatively, you can look for a rental company that won’t run your credit, although they may have other stipulations. Here is a list of rental companies that check your credit when you use a debit card and those that don’t:

Companies that perform a credit check

  • Advantage
  • Notice
  • Budget
  • Hertz
  • thrifty

Companies that don’t do credit checks

  • Alamo
  • Business
  • EZ Location
  • National

Companies that don’t do credit checks may not allow you to use a debit card, so you may want to contact them before making any 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 alternative transportation, such as:

  • Uber, Lyft, or another ride-sharing service
  • Taxi or limousine service
  • Public transport

While these options may not be as convenient, they could help prevent serious damage to your credit that could haunt you later. If your credit score is low and you need help improving your credit score, contact Credit Absolute today for a free consultation: (480) 478-4304.

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