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Do you need a credit card to rent a car?

Yahoo Personal Finance· Getty Images
Updated 4 min read

If you need to rent a car for an upcoming vacation or while your vehicle is in the shop, you may be wondering what your payment options are.

It's generally not necessary to have a credit card to rent a car, but there are some exceptions to that rule. Even if you can use another payment method, there are several reasons why a credit card can be a better choice.

Here's what you should consider when paying for a rental car.

Most rental car agencies accept both credit and debit cards. Some may even allow prepaid debit cards and gift cards as long as they carry the logo of one of the major payment networks: American Express, Discover, Mastercard, or Visa.

Before you start comparing rental rates, however, note that rental agencies typically have stricter rules when paying with a debit card. Here are some debit card policies from a handful of major rental agencies:

Although it's possible to use your debit card to rent a car, there are several reasons to use a credit card instead. Here are some to keep in mind.

Many credit cards offer rewards on your everyday purchases, including rental cars. Since rental cars are typically considered a travel purchase, you could even get bonus points, miles, or cash back with cards like the Bank of America? Customized Cash Rewards credit card or the Costco Anywhere Visa? Card by Citi.

Some, like the Capital One Venture Rewards Credit Card and the Chase Sapphire Preferred? Card, may offer even more bonus rewards on rental car reservations made through the card issuers’ travel portals.

Many credit cards offer limited rental car insurance, which typically covers you in the event that your rental is damaged or stolen — liability coverage typically isn't included.

This coverage is usually secondary in nature, meaning you'll need to first file a claim with your personal auto insurance policy unless you don't have one or you're in a country where your personal coverage doesn't apply.

However, some cards, including the Chase Sapphire Reserve? and the Bilt Mastercard?, offer primary coverage that bypasses your personal policy. American Express even allows eligible cardholders to purchase primary coverage for up to $24.95 for the entire rental period — some rental agencies charge that much per day.

Some travel credit cards, including the Platinum Card? from American Express and the Capital One Venture X Rewards Credit Card, offer other benefits when renting a car, such as a wider selection of vehicles and complimentary upgrades with certain agencies.

Regardless of your payment method, you'll typically need to make a deposit before leaving with the vehicle. If you use a debit card, those funds will be held until the rental car agency releases them. If a bill or purchase hits your account and you don't have a buffer to cover it, you could be charged an overdraft fee.

With a credit card, a deposit will reduce how much of your credit limit you can use, but it won't impact your checking account balance.

Additionally, while both credit cards and debit cards come with fraud protection in the event that someone steals your card information, you don't have to worry about your bank account being drained if you use a credit card.

Some rental car companies may require a credit check if you use a debit card. Using a credit card means you don't have to worry about a ding to your credit score.

In general, it's best to use a credit card when renting a car. But if you prefer to use a debit card, you could compromise by using a credit card for the deposit and then paying for the rental with a debit card when you return the vehicle (or prepaying for the rental with your debit card).

Before you use a debit card, however, note agency policies and restrictions that could impact your experience. Since policies can vary depending on the location, it may also make sense to carry a credit card as a backup option to avoid delays.

In most cases, you don't need to use a credit card to rent a car. However, some rental car agencies have certain restrictions when it comes to debit cards and other payment methods. What's more, credit cards offer many benefits that debit cards don't when it comes to car rentals.

While it's important to consider your own situation, review the advantages and disadvantages of both options to determine the best payment method for you.

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