Renting a Car -Credit Cards vs Cash/Debit Cards
Around in the Personal Finance Blogging community there has been some recent debate over using cash vs credit. I’ve been listening to the Personal Finance Hour, hosted by Jim Wang from Bargaineering and JD Roth from Get Rich Slowly. If you haven’t listened before its a get way get more insight into Personal Finance topics. The show is every Monday at 6:00p EST on Blog Talk Radio at the Personal Finance Hour. Two weeks ago Jim Wang and Adam Baker (from Man vs. Debt) talked about the reasons they either use credit cards (Jim Wang) or cash (Adam Baker). It was a great discussion and I agree with Baker about using cash. I got into trouble using credit cards and I have no need for them. The question about renting a car was brought up by Erica from Erica.biz , and it sounded like it was no big deal, or so I thought…
I haven’t used a credit card since February 2008. That means I only use cash and my ING Orange Debit card. Until yesterday I have had zero problems getting through life. All my bills are automatically drafted out of my ING account. My paychecks are direct deposited into the ING account. I use my Chase checking account to add my pizza delivery money into the ING account. Everything is wonderful, except when my wife tried to rent a car yesterday.
Our 2002 Envoy has been making a noise when we run the AC/Heater so we needed to take it to the shop. Needing a replacement vehicle until the Envoy is fixed we decided to rent a car using my sister-in-laws friends and family discount to reserve a car at Enterprise Rent-A-Car. We are fortunate enough to have one located 10 houses down the street. My wife walked up there to get the car, no big deal right? WRONG. Once there she gave her info and the sales guy said “Oh you’re a VIP, I’ve got a Cadillac SRV just for you. Can I have your credit card?” My wife happily gives him our ING debit card. Oops, I guess that doesn’t work at Enterprise. They proceed to tell her that without a credit card you can’t rent a car. My wonderful wife says, “Just because I choose not to buy into the credit card lifestyle and live in debt, you guys aren’t going to let me rent a car?” At this point she is raising her voice and the other customers are starting to look. The manager comes over and says she can rent the car if she can provide a resent bill from ANY utility company as proof that we can pay a bill. They drove her back to our house and she grabs the water bill and returns to the office. Oh, I guess paying a water bill to the City doesn’t count as being able to pay a bill. She needed to provide a gas or electric bill. Of cause they weren’t specific about it when they told her. Now she is furious. At this point she is ready to walk out, but she has a lot to do in the coming days and decides to get through this. They end up renting her a Chevy Impala. The manager states that since you don’t have a credit card, you can’t have the Cadillac. OMG just because you don’t have a credit card you get penalized for it. What has this world come too? Oh well just another reason to declare NO CREDIT CARDS. Yes we could have gotten out a credit card to use, but I’m not going to use it went I don’t think its necessary. The whole ordeal took over a hour and I can say that after this experience I will never use Enterprise Rent-A-Car again.
While researching this post I came across a post from NCN – No Credit Needed. The post is titled “Can I Rent A Car Without A Credit Card?” Boy do I wish I would have read this before renting a car. NCN took the time for review all the major car rental companies and their policies for Debit Cards and Cash. By the way, during the Personal Finance Hour it was brought up that NCN had written this post, but I missed that point. Too bad for me.
Enterprise Policy from NCN
Debit Card:
Some locations will accept a debit card for a rental deposit and/or payments. To be valid, a debit card must have a Visa or Mastercard logo.
Airport locations that are able to accept debit cards will require return trip itineraries.
Most local renters who would like to use a debit card for their deposit may need to complete a cash qualification process. The branch may ask for you to bring in two valid, current utility bills and your most recent paycheck stub.
It is common that a rental branch will require your drivers license to be issued in the state you are renting.
We are happy to help you with policy information specific to the renting branch. Please contact us ahead of time to determine what is needed when renting with a debit card.
Cash:
For security reasons, our locations do not accept cash. We apologize for any inconvenience
As with all things today, research is our only line of defense. Thanks for the GREAT post NCN.
Now all thats left to do is get the Envoy fixed, turn in the rental, and never go back there. I’m still not changing my mind, I love not using credit cards.
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Amen and Amen!
Most people would give in and say, oh… well this is all the more reason to use credit cards. WRONG. You have the right attitude.
Why should you have to have a CC just to rent a car. If you don’t believe in that, then you do what you did… you take your cash money elsewhere and work with someone who will. I guarantee you will find someone around town who will rent to you.
That ladies and gentlemen is called “free market consumerism”, and is a top-notch example of capitalism.
Way to go man.
Most people with no credit cards are people with bad credit and can not get one. If you were to buy a $10,000 car the bank asks you a zillion questions and qualifies you from credit to job to income and so on. How could you expect a rent a car company to just hand you the keys to a $30,000 car with a debit card which is only good for the money that the account has in it (it could be as little as $300). Try and ask a friend for their $30,000 car and see what they say. There has to be some sort of qualification standard and the credit card is that standard. Anything less than a credit card is risky business for car rental companies. They have had to swallow a lot of damages to rental cars from cash and debit card customers who are only good for the few hundred dollard they have in their account. After the car is damaged or totaled all the rental company can get out of them is a finger.
I’m with Matt and Jeff here. I’ve actually rented a car with a debit card before, but if I couldn’t, I would look until I found somewhere that could provide it for me. With a debit card that is backed by Visa or Mastercard, Enterprise could still run the transaction as credit and charge you whether you have the cash or not. Through my bank, Suntrust, the transaction would go through, and I would be penalized by Suntrust for not having the money to cover the transaction. But Enterprise would still get their money.
I don’t think “most people without credit cards are ones with bad credit.” I don’t have any credit cards now because I chose to stop using them as a crutch. I think it’s more important to have an emergency fund for emergencies, instead of calling on plastic to do the job. If being unable to rent a car is the worst thing that’ll happen to me for not owning credit cards, then I’m okay with that.
Red´s last blog ..Bitten by the debt payment bug
Well said Red. I feel the same. I was a pain renting this time, but I know the tricks now. I understand a company has to protect itself, but there are also going to be people like us who choose to paid the old fashioned way and they need to understand that. Oh knows, maybe sometime in our live we’ll see cash disappear and have to switch to some form a plastic or a “Credit Chip” implanted in our arms
Free market consumerism is what I try to practice everyday. I think about while I’m performing my day job (how can I provide better value and service) for our customers. I think about in my real life by giving my money to people and products that have my consumerism in mind.
Thanks for the great comment Matt. I know from all your posts how you feel about credit cards – SHRED THEM
I just received a new card today because the old one expired. I’m calling to cancel the account, but I’m thinking of video taping the death of the card. I’ll post it here once I have the perfect plan.
Jeff
Thanks for comment Raffi. You bring some good points to the table. I completely understand that they need a process to cover the company’s risk. I just have a hard time seeing the difference between a $300 hold on a debit card and a $300 hold on a credit card. That credit card may have a limit of $350, so how would that play into the equation? Isn’t the $250-$500 hold on the persons account just to cover the deductible in case of damage or theft?
Again, you made some good points. Thanks for taking the time.
Jeff
Raffi: My heart goes out to you… I used to believe the same thing.
Trust me friend, it is not only possible… it is easy, and it is right. My your eyes be opened in wisdom.
Cheers!