If you have been turned down for a rental car because you tried to pay with a prepaid debit card, you should know that you have other options.
Some car rental agencies will not accept prepaid debit cards. They do this because they are worried that if you incur additional charges, they will not be able to tap your account for the additional funds.
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Rental car companies have a few options. They can place a hold on some of the funds in your account. They will tell you if they intend to do this. You’ll need to be able to set those dollars aside until your account is credited back the deposit. Unless you can afford to give up access to hundreds of dollars, this condition is critical to know because it might take several weeks before the company restores the money to your account.
I’ve reviewed the policies at the national car rental chains and several of the smaller independents. Here is what I found:
· Hertz: Hertz does not accept prepaid debit cards.
· Avis: Avis does not accept prepaid debit cards.
· Dollar: Dollar does not accept prepaid debit cards. You can pay with a prepaid debit card at the end of the rental. But you will have to present a credit card or a traditional debit card at the time of registration.
· Enterprise: Yes, in most cases. Enterprise will accept a prepaid debit card, but they will reserve a deposit on the account. A further caveat: if you pick up the car at a travel-oriented place like an airport or a cruise ship port, then Enterprise will expect to see that you have a ticket confirming a return trip.
· Budget: Some locations will accept a prepaid debit card at the moment of the pickup, but the policy does not convey to all of Budget’s stores. As well, Budget may ask to hold as much as $500 on your account. If you are under 25, you may not use any debit card.
· Alamo: Yes. As long as the prepaid debit card bears the logo of MasterCard, VISA, or Discover, you can use the card. However, if you pick up a car at an airport, they will ask to see your return ticket. The same policy holds for destinations associated with cruise ships and trains.
· Thrifty: Thrifty will accept prepaid debit cards, but they are likely to hold funds as a deposit. Outside of the United States, Thrifty agents may not accept a debit card. Thrift recommends that a person use a credit card.
· National: National will not consider any debit card (prepaid or demand deposit) that does not bear the logo of Discover, VISA, or MasterCard. They will not accept prepaid debit cards in every instance. National will want to see evidence of a return trip if you rent the car at an airport or a similar travel-oriented point-of-departure and try to use a prepaid debit card.
Independent car rental companies usually offer more flexibility for travelers who do not have a credit card.
· Rent-a-Wreck: Rent-a-Wreck will allow a consumer to use a prepaid debit card at the time of pickup. They will verify that you have good funds and place a hold before they give you the keys. The cost of the rental is assessed at the time of pick up, along with an additional security deposit of $150. Rent-a-Wreck advises that it may take 14 business days for the bank to return the deposit.
· Fox: Fox will not accept prepaid debit cards. In fact, Fox is somewhat conservative about all types of debit cards. If you want to rent a car in your hometown and can’t use a credit card, you are out of luck. Fox will not accept any debit card from a person who lives less than 150 miles away from the store.
· Ace: Ace Rent-A-Car leaves it up to the individual location to set a policy for paying with prepaid debit cards.
Even if a car rental agency does not accept a prepaid debit card as a form of payment at the time the car is picked up, many will let you use one when you return the car and authorize the final charges.
Some additional thoughts - and a better option
As you can see from my reporting above, most rental car companies will hold funds on your account when you rent a car. They do that to protect themselves. If a person returned a car after the agreed-upon time, or if an uninsured car came back with damages, then the rental car company would have to have some means to collect additional funds. If you had used a credit card, then they would not have to worry about absorbing a loss, because the company could just debit your card for the additional expenses. That may not be the case with a prepaid debit card, as the account could return the charge unpaid. As a result, rental car companies tend to ask you to set aside more funds than just the cost of the agreed-upon duration of your rental. For example, you might sign a contract to rent a car for three days for $310. A company might debit your card for that sum, plus place a hold on the account for another $500. (To that point, Budget Rental Car sets aside a $500 hold.) You would not have access to the $500 until the hold was lifted. To make matters worse, you might not see the funds restored until well after the car was returned.
I know of one bank that canceled its prepaid debit card solely because too many customers complained about holds. In lieu of continuing to offer a prepaid debit card (and thus having to continue to answer calls from angry customers), the bank opted to pivot to offering a traditional debit card. Notably, they structured the card so it would be available to approve everyone - not just individuals with good credit. In other words, they desiged the debit card account with an approval policy that allowed the bank to continue to serve the same customers as they had previously with the prepaid debit card service.
I would suggest that people apply for a Varo Money debit card in lieu of getting a prepaid debit card. Varo is a fee-free bank account, available without a credit check, that will do more than you could achieve with a prepaid debit card. You will be able to rent a car without having to put down money for a hold.
Uber will let you use a prepaid debit card. Uber's criterion for card acceptance is that it must be network-branded. In other words, as long as your prepaid debit card bears the logo of VISA, MC, AMEX, or Discover, then you should be ok. An exception would be fleet cards, as they are closed-loop accounts.
The rules are the same at Lyft. A caveat is that certain payment methods may not work with a prepaid debit card. You can pay for Lyft with ApplePay, Google Pay, and PayPal. Not all prepaid debit cards will work with those services.
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