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4 DANGERS OF RENTING A CAR WITH NO CREDIT CARD
September 19, 2015
You’ve got a driver’s license, a clean driving record and money in the bank, and
you’re looking for a car to rent. But if you don’t have a credit card, the process could take a lot longer — and be a lot more expensive.
Here are some of the risks of renting with no credit card.
YOU WON’T GET THE BEST DEAL
Several companies, including Hertz, Avis and Advantage Rent-A-Car, won’t let you rent a car if you don’t have a major credit card. In some cities, this means you’ll have fewer options, so instead of comparing rates, you might be stuck with whatever is available.
IT COULD HURT YOUR BUDGET
With a credit card hold, car rental deposits can be made and refunded before you have to pay your credit card bill. But if you have don’t have a credit card and instead are relying on a debit card, a hold of $200 or more could make your budget a lot tighter. You won’t be able to access these funds until you return the car, so keep an eye on your account balance to avoid overdraft fees.
IT MIGHT NOT BE THERE WHEN YOU NEED IT
The car rental companies that let you rent without a credit card, such as Dollar and most Budget locations, will run a credit check before offering you a car. In some cases, you might be asked to also provide a travel itinerary. This additional paperwork will take longer to process and it could delay your travel plans.
Keep in mind that companies don’t usually rent to people with bad credit or no credit history. If you lack a credit history, focus on finding your first credit card, then building your credit score. In the meantime, consider other options, such as asking friends for rides or using public transportation.
IT COULD HURT YOUR CREDIT
Renting a car without a credit card means the companies will have to pull your credit report, which is reported as a hard inquiry and dings your credit score by five points, according to FICO. If you rack up a lot of hard inquiries on your credit history, it could be more difficult to apply for a credit card down the road.
THE SOLUTION: GET A CREDIT CARD
If you’re hoping to get a rental car without a lot of hassle, do yourself a favor and apply for a credit card. If you have no credit history, consider getting a co-signer to qualify for an unsecured credit card.
Once you have a credit card, you can work on building a stronger credit history with on-time payments and low credit utilization. This way, you’ll continue reaping the benefits of good credit long after you turn in the rental car keys.