Debit Cards and New York Car Rentals

Over the past several years, many customers have preferred to use debit cards to reserve, and pay for, a New York car rental. According to the Federal Reserve, debit card transactions have been growing more than 20 percent annually. In fact, today debit card transactions now exceed credit card transactions. Yet, despite their popularity, most New York car rental companies prefer the customer use a credit card rather than a debit card. Why is that?

Risks associated with debit cards

When you use a debit card to make a purchase, such as groceries or household items, you take your purchase with you. When you rent a car, the car rental company expects the car to be returned. When a customer takes an item from a store, the most the store can lose is the value of the item. When it comes to a car rental, the car rental company is at risk for the car rental charges, the value of the car, as well as the potential cost of an accident. This could end up costing the car rental company thousands of dollars.

Furthermore, when a customer has a credit card, someone had to perform a credit check on the customer; a debit card is an electronic form of cash and thus does not require a credit check of the customer. When the customer has a credit card, the credit card company has verified the customer. New York car rental companies prefer customers use their credit cards to reserve a rental vehicle as this assures the rental agent that the customer has acceptable credit, which is not the case with debit card customers.

All Car accepts debit cards for New York car rental deposits

All Car Rent A Car prides itself on meeting the needs of the community it serves and understands that many customers do not have credit cards and does accept debit cards as a form of deposit. Like those companies which do accept debit cards, All Car only accepts co-branded debit cards with the logo of Discover Card, Visa, or Mastercard. Please note that the required deposit for customers with credit cards is usually less than the required deposit for customers with debit cards.

How a debt card deposit works

The typical debit card deposit for a New York car rental customers is the cost of the rental vehicle plus a few hundred dollars. Being that a debit card is not a credit card, the customers monies are held by the car rental company. With a credit card, the credit card company places a hold on the customer's credit line, but does not actually charge the funds. Again, since a debit card does not give the customer credit, the customer's money is held with a debit card while the customer's credit is held with a credit card.

Any "unused monies" which are held as a debit deposit and are not needed to pay for the rental charges are returned to the customer's account. While the car rental company releases the money as soon as the rental closes out, it may take the debit card company some time to actually return the funds to the customer's account.

Finally, no debit card provides the customer with collision protection for the rental car. Such coverage is available on some credit cards, though usually only secondary to any car insurance the customer may already have.