Why do rental cars put a hold on your credit card?

Why Do Rental Cars Put a Hold on Your Credit Card?

When you rent a car, the rental company will generally put a hold on your credit card for a certain amount of money as a security deposit. This is to ensure that they have a way to cover any damages to the car or additional charges, such as fuel fees, that may occur during your rental period. The amount of the hold can vary depending on the rental company and the type of car you are renting. Typically, the hold amount is between $200 and $500.

FAQs About Rental Car Credit Card Holds

1. Why do rental car companies put a hold on your credit card?

Rental car companies put a hold on your credit card to cover any potential damages to the car or additional charges that may occur during your rental period. This is standard practice in the industry to ensure they are not left with any unexpected costs.

2. How long does the hold stay on your credit card?

The hold on your credit card will generally last for the duration of your rental period, plus an additional day or two to allow for any potential additional charges to come through. Once you return the car and the final charges are settled, the hold should be released within a few business days.

3. Can I use a debit card instead of a credit card for the hold?

Some rental car companies do allow you to use a debit card for the hold, but there are usually more restrictions and additional requirements. It’s best to check with the specific rental company beforehand to see what their policies are.

4. Does the hold affect my credit score?

The hold itself does not directly affect your credit score, as it is not a loan or line of credit. However, if the hold amount is close to your credit limit, it could temporarily impact your credit utilization ratio, which is a factor in your credit score.

5. Can I use a different credit card for the hold than the one I used to book the rental?

In most cases, rental car companies will require the same credit card for both the reservation and the hold. It’s best to check with the specific company to see if they have any flexibility on this policy.

6. Is the hold amount the same for all types of rental cars?

The hold amount can vary depending on the type of car you are renting. More expensive or luxury cars may have a higher hold amount, while economy cars may have a lower hold amount. It’s important to inquire about this when you make your reservation.

7. Can I get the hold released earlier if I return the car ahead of schedule?

Most rental car companies will release the hold once the rental period is over and the final charges have been settled, regardless of when you return the car. However, it’s always best to confirm this with the rental company when you return the car.

8. Will the rental car company charge the hold amount in addition to the rental charges?

No, the hold amount is not an additional charge. It is simply a temporary authorization on your credit card to cover any potential charges that may occur during the rental period. The actual charges for the rental will be processed separately.

9. What should I do if the hold is not released after I return the car?

If the hold is not released within the expected timeframe after you return the car, you should contact the rental car company directly to inquire about the status of the release. They should be able to provide you with more information on why there is a delay.

10. Can I use a prepaid credit card for the hold?

Most rental car companies do not accept prepaid credit cards for the hold, as they are not able to authorize additional charges if necessary. It’s best to use a traditional credit card for the hold to avoid any issues.