Just the other day I had a conversation with the agent behind the National Car rental company. I had just flown into town and, as always, was about to hand the guy my debit card… until I stopped.

Porsche Cayman, Ávila, HDR
Marc via Compfight

You see, whenever you use a debit card, rental car companies will immediately put a hold on your bank account for up to 24 hours, which is frightening if you don’t have enough money to cover the cost up front because it’s always a bit more than what the rental agreement is for. Also, if you come in from an airport they ask you a lot more questions and want to look at your itinerary showing that you indeed will be going back home.

This time, since I was the only one in line, I decided to ask the question “why”. The agent said:

“When people use debit cards, if something like the car being stolen or going missing happens the only liability a renter has is what the agreement cost was on the car. That’s because banks don’t guarantee anything except whatever amount a car is rented for.”

“However, if you use a credit card and the vehicle is stolen, both the renter and the car rental agency is protected and insured and the rental agency will get back what they’ve insured the car for.”

“Finally, with a credit card there’s a true history of use so, if need be, we can track down the renter to verify their story about a car being stolen, because sometimes the thief is the renter. With a debit card, there’s no history because of banking confidentiality, so there’s nothing saying a renter is giving us their real address, even if they have a driver’s license. If the renter has moved, the credit card company will know it, but a bank won’t give up that information.”

I found this intriguing and decided to test it. I gave the guy my platinum American Express card and that was that. He didn’t need to see my itinerary, my credit card didn’t get hit with a day’s fee, and when I had to see the woman to pull my car out of the garage all she asked for was the paperwork I signed inside and my driver’s license again; nothing else, and on both ends things moved faster than before.

It never occurred to me that there were differences in liability between debit cards and credit cards, especially because my business debit card has the name of my business on it. So does my platinum American Express, but not only will that work better in the long run but I’ll earn points on the card that I won’t on the debit card. Looks like a win-win to me. 🙂

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