Here’s a question we receive all the time from folks who are considering prepaid debit cards:

Can I use my prepaid debit card to rent a car?

This is a great question, and many people don’t think about it until it is too late. Here’s the answer — “it depends” (sorry about the weasel-worded answer!).

Here’s the deal. When you rent a car, the car rental agency doesn’t know the exact amount they are going to have to charge you for. Sure, they know the rate that you’ve agreed to, and they know the amount of taxes and insurance to charge you, but they don’t know whether they will need to charge you extra for gas, or extra mileage. They also don’t know if you will really return the car on time or in good condition.

So, car rental agencies place an “open ended” charge hold on your debit or credit card when you reserve, so that they are comfortable giving you the keys to a $15,000 (or more) vehicle.

What does this have to do with prepaid debit cards? Well, if you rent a car with a prepaid debit card, you may wind up not having access to your cash until you have returned the car. The funds authorized (and “held”) for the rental car company will be unavailable for your use until the final rental charges have posted to your account.

This means you may that you will not have access to your money for days (or even weeks!).

So, we recommend that you either use a credit card to rent a car, or that you at least call your car rental agency and discuss this issue with them before booking a car using your debit card.

Good luck, and safe travels!

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Related ChexSystems Banking Information:

1. What is a Prepaid Debit Card?
2. Why Should I Use a Prepaid Debit Card?
3. How Do I Add Money To a Prepaid Debit Card?
4. Prepaid Debit Card — More on the Satisfaction Survey
5. Everyday Prepaid — MasterCard’s New Prepaid Debit Card Campaign