The whole long litany of literature that I got when I opened my checking account was that my Visa check card, complete with real-life Visa logo and sixteen numbers, was “the same thing” as a Visa Credit Card as far as where and how I’d be able to use it. “Any business that accepts Visa will accept your Visa check card as though it’s a credit card!”
However, I ran into a snag today. I tried to rent a car using my Visa check card, and though it’s tied to my bank account and I had plenty of money on-hand [I expected them to nail me with a multi-hundred dollar hold, at the least], they rejected it, claiming that I had to use an actual credit card and not one tied to a bank account. I protested that since they had a Visa logo in the window of their office, they were telling me that they accepted the card in my wallet, and that they were in the wrong by refusing it, much like merchants that try to tack on extra fees or set minimum purchases for using credit cards. The manager wouldn’t budge in spite of my promise to inform both my bank and Visa.
Was he in the right? I thought the whole point of a Visa check card was that it’s treated just like a credit card as far as the merchant is concerned - not an ATM card, not a debit card, but a Visa card. Did the merchant violate some sort of merchant agreement that he has with Visa?
The card can be used just like a VISA credit card for actual merchant purchases. It does not serve the same function when used as security toward variable and possibly unknown future balances such as you run into with car rentals, hotel rooms, etc.
In other words (and generally speaking), you can buy stuff with it but you can’t secure stuff with it.
The reason for this is that purveyors of services know that the credit card companies have the wherewithal to pay up whereas your checking account may not.
Is that actually something that’s in writing in the policy? It’s funny, because I was actually trying to pay up front rather than simply putting the card down as an “IOU when I return it,” so to speak. They were touting a savings of a few bucks if you paid up front.
Holds aren’t necessarily a good thing from the merchant’s point of view. You may go over the amount held, and you might get annoyed and give them grief over how much they want to hold and for how long they’ll keep the hold in place.
As far as the point of having one, you get the convenience of using a VISA card for your purchases rather than having to carry cash or trying to get a check accepted (especially important if traveling out of town), and you don’t have to pay interest on your purchases. It’s a convenience thing.
The card and the system are not directly connected to your bank account, a merchant terminal will not be able to say how much money is in your account. Generally there is about a $500 daily limit per card per day* that is in no way affected by your balance.
I think that they need a card not to ensure payment of your fees, but rather to make sure that they get paid if Something Bad happens. Imagine a situation where you insure yourself but then an uninsured acquaintance borrows the car and smashes through a crowd of people, then straight into the Louvre and into the Mona Lisa, and finally stops by running smack into the Liberty Bell. Your paid-up-front $200 aren’t going to do much good. Then again, I don’t know what they’d do if the total damage went past your credit limit, but at least it’s better than nothing.
That’s odd. I’ve never heard of a car rental company offering a savings if you paid up front, although I suppose that they could do so without trouble as long as the final charge was what was previously agreed upon.
The snag is that you (not you personally, but others) might run up a huge bill and they would have no good way of collecting it from you if the amount if your checking account wouldn’t cover it.
I think part of your unhappiness lies in thinking that this sort of thing is VISA’s responsibility and therefore under VISA’s control, and it isn’t. It’s up to the individual hotel or rental car company to decide what sort of security they’ll accept.
Perhaps the fundamental difference is that with a credit card they can charge additional days if the card is not returned on time. With the debit card, that $200 charge may be the last $200 you have. It seems like if you were guaranteeing with a credit card and paying in advance with a debit card, that might have been OK. I think accidents would be covered by insurance rather than the credit card. You would either provide proof of insurance or purchase theirs, so it seems like the risk of extra days is what they are protecting themselves against.
And I’ll point out that the reasoning that “the security is that they can charge more” is wholly incorrect, although that may, in fact, be the merchant’s reasoning.
My credit card may not have another $5 on it after you put a hold on.
A hold accomplishes the same, whether it’s on a debit or credit card.
I’ll submit that the decision to trust credit rather than debit is probably based on either user profiling [credit card users are wealthier?] or on customer satisfaction [he got WHIZZED when we smacked his checking account with $3212 in late fees on that rental car, and burnt our LAX rental office to the ground!!].
I seem to remember that this has come up before, and as I recall the courts have determined that for some reason, CC companies cannot force merchants to accept debit cards as a condition of the merchant agreement. (I forget the reason, but I think it has to do with the wildly different legal regulations under which CCs and debit cards work.) I believe the CC companies response was to dictate that the merchant signage must indicate if only CCs are allowed. If they just show the Visa logo without the words “credit only” or some such, they are supposed to honor all Visa cards. Whether this has the legal teeth that other parts of the merchant agreement (or if it is even part of it) and whether Visa would consider it worth enforcing, I do not know.
Mr. Slant and I simulposted. The Visa rules for signage are on page 9 of the document he linked to. It states
which makes it sound mandatory, but since the rule they are breaking is about displaying the proper logo, not about accepting your card, the required remedy should Visa step in won’t likely make you any happier.
When a charge puts a person over the limit, that does not necessarily mean the merchant can’t put the charge through and get paid. The credit card company can choose whether or not to decline the over-limit charge. Going over the limit does typically give the person’s credit card company the right to charge an over-limit fee.
Note that those rules are not related to credit card vs. debit card, they are related to card-present and card-not-present. Card-not-present transactions are phone and internet orders.
I have been pissed off for years that car rental agencies won’t take a debit card when you pick up a car (but they will accept it for final payment when you check out).
This confused me as well, but after asking a lot of questions, I think I know what US types mean. A check card is a debit card that carries a Visa or MasterCard logo, but does not require a signature or PIN to use. At the user’s bank, each purchase is handled as if the user had written a cheque for it. When this was explained to me, it seemed amazingly insecure (No PIN? No sig?), and I think that signatures are required now, at least.
This is different than Canadian debit cards, which are an outgrowth of the banking cards used in bank-specific ATMs, and don’t have anything to do with Visa or MC at all. In Canada, the ATMs were all interconnected, and then point-of-sale terminals appeared, but this was a completely-separate system. The PoS terminals handle Visa and MC now as well, but I think that for a long time, they were separate.
Yes, most of the time when I use one I have to sign either the paper slip or on the signature line of a computerized point of sale terminal, but no one ever seems to ask for other ID to make sure I’m signing my own name. Debit/check cards can also be used quite easily for online purchases using nothing but the credit card number and expiration date.
