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Personal finance writer
Specializing in new trends in credit
If you prefer to use debit cards instead of credit, even when traveling, your next trip may have just gotten a lot less stressful.
Depending on where you visit, you may no longer have to jump through hoops to rent a car with a debit card.
Travel giants Dollar and Thrifty announced Feb. 6 that, effective immediately, they are relaxing their restrictions on debit card users.
Unlike many car rental companies, they will no longer require debit card users to pass a credit check before being granted keys to a rental car.
Consumers who book their car rentals at least 24 hours in advance won’t have to provide proof they’ll return either, nor will they have to provide a second form of identification.
Previously, only credit card users were able to book a car rental without worrying about a credit check or providing a proof of return and multiple forms of identification.
“This is yet another way we can do our part to help minimize any stress when traveling, especially for our customers who choose to use a debit card,” said Dollar’s Susan Jacobs in a news release.
Debit card users will still have to provide two forms of identification and proof of return if they book a car at the last minute or opt for a luxury car.
Some debit card holders may also still run into trouble using their debit cards, depending on where they travel. For example, if you try to book a Dollar car rental in the New York Tri-State area or in parts of Hartford, Connecticut; Philadelphia; Boston; Manchester, New Hampshire or Detroit; you won’t be able to use debit to book your reservation. But you’ll be able to use it when you return.
Hertz (which owns both Dollar and Thrifty) is also more restrictive. Some Hertz locations, for example, still require proof of return and two forms of identification if you use a debit card to book your car.
See related: 9 tips for renting a car with a debit card
For many car rental customers, it’s a pain to use a debit card
Dollar and Thrifty’s new debit card policy is a big shift from previous years, when they and other car rental companies imposed a number of restrictions on debit card users out of fear they’ll be less reliable than credit card holders.
For example, many car rental companies continue to require a credit check before they’ll approve your booking and will only let you use debit if your score passes a certain threshold. According to Dollar, for example, consumers with credit scores under 660 weren’t allowed to book a Dollar rental with a debit card.
Others require multiple forms of ID or require you to use a credit card to hold your reservation, even if you use a debit card to pay for your car rental after you’ve used it.
Many also require you to show some sort of proof that you’ll return, such as a round-trip airline ticket, and provide a bigger deposit.
Some car rental agencies won’t process your payment if your debit card doesn’t have a Visa, Mastercard or Discover logo. Others won’t accept debit card payments at all, or will only accept them in certain locations. A number of car rental companies also refuse cash and prepaid cards, so if you don’t have a credit card, you’re out of luck.
Debit card policies typically vary by location, and so it’s wise to check ahead of time before you book a trip.
Car rental companies justify their policies by arguing that debit cards are riskier forms of payment. For example, if you use a debit card to book your rental, but don’t have enough cash available to pay for your trip or for additional expenses, a car rental company could get stiffed.
As Thrifty once wrote on its own website: “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.”
However, as Dollar noted in its press release about its new, more flexible policy, many people don’t own a credit card and so have trouble accessing a rental. Others have never used credit and so they may not be able to pass a credit check either.
See related: Which cards are best for renting a car?
Will others sign on?
For now, it appears Thrifty and Dollar are among the only major car rental companies with such loose debit card policies. But if others follow suit, it could be a big deal for consumers who eschew credit cards or aren’t able to qualify for one.
Some credit card holders may also be less interested in using a credit card now that issuers such as Discover have dropped car rental insurance as a protection.
That said, if you don’t mind using a credit card and own a card that still offers car rental coverage, you could be better off charging your reservation instead of using debit – especially if your credit card offers primary coverage.
Just be sure to read the fine print of your card agreement before relying solely on a credit card for damage protection: Car rental coverage can vary greatly, depending on the card and where and how you’re traveling.
If your credit card doesn’t offer great coverage and you’re trying to limit your charges, you may decide to just use your debit card now that it’s no longer such a hassle.