I haven’t had a credit card, or any kind of loan, in many years. I’m retired and have lots of assets. But I hear it is difficult to rent a car or other vehicles such as an RV if you don’t have one. I do use debit cards and have plenty of money in the checking accounts they tap.
Is it true not having a credit card makes vehicle rental difficult, or often impossible?
I don’t actually want to spend money from a credit card account. I could spend for example a vehicle rental (I’d immediately pay it back), but I don’t even actually want to do that unless necessary.
I don’t know my credit score. I checked my 3 credit reports and they don’t show any negatives, but, then, they don’t show any lenders making money on me, either.
I was thinking of asking my financial management company for a card, or else a bank where I have lots of money deposited. Am I right to anticipate I should have no problem getting a card?
How big a line of credit do vehicle rental companies need to see before giving me a vehicle? Or do they even know?
It’s weird – maybe 10 years ago I had to rent a car, and had to have my spouse come with me and use her credit card. She owed a lot and was nearly at her limit on the card, and my VISA debit card was attached to a checking account with many thousands in it, but they would only accept her card and not mine. I don’t understand.
The purpose of the credit card is to serve as a kind of deposit against incidental and/or real damage. They ultimately don’t really care how you pay for the rental, but they need some sort of collateral against their property they are loaning you other than the rental fee.
Just get a card from your bank with a relatively low limit, like $2500. When you rent a car they put a hold on the card for a few hundred dollars that is “released” when you return the car. Unless they have a legit reason to, they should not actually charge anything unless you opt to pay with that card.
I have rented cars (recently) without using a credit card. I had to pay a reasonable deposit ($200-$300) which was returned a few days after I returned the vehicle. It will depend on the rental agency, though; Enterprise would not do so without a credit card, but the rental agency across the street had no problems with it.
Do you have a mortgage? That should help you get a credit card.
If you truly have had no debt of any kind for years, you basically don’t have established credit. I would say by all means go to those financial institutions who already know you (and are already making money off of you) to get the best deal on a credit card.
Once you have the card, use it regularly. It doesn’t have to be large purchases or a lot of purchases or a lot of money, just establish a pattern of incurring debt and then paying it off. Pro tip* – your purchases accumulate during the credit card’s billing period and then once a month the billing period ends, and after that you have 3 to 4 weeks to make your payment. The tip is to always pay it off right after the billing period ends, and don’t wait for your payment deadline. Your credit score will improve faster if you do that.
I don’t know if car rental companies still absolutely require a credit card. They might have an alternative where you can post a bond of some sort, against which damage charges could be drawn if the car is damaged. Or prove to them that you have impeccable car insurance that would cover all damages. That’s what they’re really worried about, is damage to or loss of the car.
*Not really a pro, but I have proved this to my own satisfaction in the past couple of years on my own credit card account.
Generally speaking, you can find lots of links on Google telling you that you should have and be using a credit card in almost every situation.
Fraud - you’re better protected with a credit card. You are potentially on the hook for more with a debit card and what the crooks grab comes out of your cash instead of your credit line. If you needed that cash to pay bills, you will probably get it back, but it’s gone until the bank has resolved the issue.
Consumer protection - if something goes wrong with a transaction, you can dispute the charge on a credit card. On a debit card, the money’s gone
Think about that rental car situation. Suppose something goes wrong with the deal; the car gets stolen, busted up in an accident, whatever. The rental company can lock up your cash for an uncomfortably long period of time while you argue with them if you used a debit card. They can certainly block funds on the credit card, but you can still pay your bills while you’re ironing out the situation.
Does your debit card have the Visa or MC logo? Many debit cards can also act as credit cards. If yours is like that, many rental companies will allow you to rent using your debit card. For example:
Best solution is to get a credit card, in addition to your debit card. Your bank should be able and will love to issue you one (they get the merchant fees, when you use it). Use it every month for a fill up at the gas station or something trivial, and pay it off monthly. This will help you maintain a credit rating, in case you may need it someday. (options are valuable, and this one doesn’t cost you anything other than the time to think about using that credit card each month at the gas station and remember to pay it off each month). Then you have a viable credit card you can easily use and without hassle to rent a vehicle every once in a while.
Benefits to you: You have an established credit rating, that you may need in the future and you get a no hassle means of renting vehicles.
In my experience, car rental agencies have long required credit cards. A poster upthread mentioned being able to rent one without, but I’m sure this is rare, particularly these days when virtually everyone has one.
Yes, IMHO you have the wrong attitude about credit cards. Your avoidance of debt is commendable. but you shouldn’t think of credit cards as debt. They’re an exceptionally convenient and secure way to make purchases, they help to bolster your credit rating, and many of them offer rewards like air miles or cash back – all while costing very little or nothing if you pay your bills on time. Premium cards like Visa Infinite do have a small annual fee, but also come with additional benefits.
I would approach a bank where you do most of your business and where they know you and solicit their help. This might yield better results than just sending in an application. It’s likely that in your special circumstances you’d qualify for a premium card even without a strong borrowing history. Nothing wrong with a card with a high credit limit, either – it’s no risk to you, it helps your credit score, and it may come in handy in an emergency.
Don’t try to use a debit card !!!
I tried to hire a car in December, entered all details, paid with debit card, got
confirmation email, walked 2 miles across town only to be told that i couldn’t
take the car as my card “could not be validated”.
Found out a few weeks later that they had withdrawn the money anyway, and
it took 6 months to get it back.
Bastards.
I haven’t paid a penny on credit card fees or interest for over 40 years, and I have gotten thousands of dollars back from Discover. If you pay on time and pick the right cards, it is a way of getting money from the system, not paying into it.
Besides rental car companies, many hotels these days require a card as a deposit even if the room is being paid for by someone else, like my conference. Having one makes life easier.
I’m surprised that your credit reports did not have a credit score on them, but there are plenty of places to get it for free.
I know the news talks about all the people with credit card debt, but it isn’t necessary to run up, and you are leaving money on the table. And, as mentioned, putting yourself at risk by using an unprotected debit card.
Slight nit - around here most of the gas stations charge more for credit, between 6-15¢ / gal. Substitute grocery store for gas station & you’ve given sound advice
Think about it this way - when you carry your debit card in your wallet you have your whole bank account in your wallet. When you give it to someone to pay with it, you’re handing them your whole bank account. When you just carry a credit card, it’s someone else’s money. You get to borrow their money interest-free for 30-60 days and you make one payment to pay them back. And then yeah on top of that they will give you a 1%-5% credit on purchases.
Unless you can’t be trusted to properly use a CC, there’s no reason not to use one.
I don’t if this is standard, but I have arranged with my bank that they pay off the CC debt from my bank account on the due date every month, so I don’t even have to worry about missing a payment. I don’t know what’s in it for them; the merchant fees I guess.
I love credit cards and their benefits. By way of example, one of my credit cards was a premium card that gave air miles points – and still does – and has now become Visa Infinite. I’ve accumulated enough air miles on that card alone for multiple business-class flights that I and the family have taken over the years, as well as free products like a Sony flat-screen TV and an Apple iPad. It currently has a credit limit sufficient not just to rent a car, but to freaking buy a new car. I don’t consider that any kind of risk because of laws that severely limit a cardholder’s liability, which is usually zero – provided only that you notice and dispute any fraudulent transaction. Ironically, the very few transactions I’ve ever had to dispute occurred on my garden-variety ordinary card and not the premium one.
My CC is not at all affiliated with my bank, and I have set my CC to draw the funds from my checking account to pay off my balance each month. My bank realizes no gain from this transaction.
To the OP: I have also set my various bills (utilities, cell phone, cable TV, etc) to be charged to my CC each month. As I said, the balance is automatically paid, so I do virtually nothing and I realize the cashback benefits from my CC. I get 2% cashback on all transactions, which can be significant.
Actually, just to help us slower readers, why do banks offer credit cards? I mean, how are they going to make money? If I find a card with no annual fee, cashback, and I’ve arranged for it to automatically be paid off every month, are they basically just losing money on me and hoping I don’t stick to my plan? What’s their motivation to keep me as a customer?