Yes, you can easily rent a car with a secured credit card. Renting a car can be exciting if you have a secured credit card. Secured credit cards are geared towards individuals with poor or nonexistent credit histories; however, they come with certain restrictions, such as rejection by certain car rental companies.
In this article, we will delve into the features of secured credit cards—what they are, how they function, and, most importantly, how you can rent a car with one. So, buckle up and get ready to learn all about secured credit cards and renting a car!
What is a secured credit card?
A secured credit card is a credit card that requires you to provide a cash security deposit to open an account. A deposit protects the issuer from losing money if you don’t pay your bill, so it’s easy to get secured credit cards for people with bad credit or no credit history.
Here’s the deal: When you apply for a secured credit card, you’re asked to put down a cash deposit—think of it as tucking away a secret stash in a digital vault. This deposit isn’t just a formality; it’s your golden ticket. The card issuer nods approvingly, and voilà! You’re handed your very own credit card.
But why the fuss? Well, secure cards are the bridge for credit novices, rebuilding warriors, and anyone who’s ever faced a credit hiccup. They say, “Hey, friend, let’s build something together.” You pledge your deposit, and they grant you access to the credit card kingdom.
Now, how does it work? With a secured credit card, your deposit becomes your credit limit. It’s like saying, “This much credit power is yours!” You can use the card wherever the card brand is accepted, just like any other credit card. And guess what? The card issuer reports your responsible behavior to credit bureaus, which can help improve your credit score.
How Does Renting a Car Work?
Now that we know how a secured credit card works, let’s see how the car rental process goes next. Renting a car means temporarily taking the vehicle from a car rental company for a defined period of time. Convenience and flexibility are the main advantages of renting a car, whether for business or vacation or if you need to drive something until your vehicle is fixed.
It would be best if you normally met the guidelines imposed by the rental car company to be able to get a car. These conditions may include being at least 21 years old (or 25 for some companies) and having a valid driver’s licence and credit card at the time of rental. The credit card is used as a payment method for the rental price and acts as a guarantee if there are any damages or extra fees.
Does renting a car with a secured credit card affect my credit score?
No, renting a car with a secured credit card and acting responsibly will not affect your credit. Your credit score depends on your secured credit card. Your credit score should not be negatively affected if your credit card is used responsibly. To prevent gauge risk, the car company will check your score. It helped build their trust in borrowers.
By checking your credit score, lenders will most likely give you a hard inquiry into your credit history. Sometimes, this inquiry devalues your credit score. If you don’t make your payment on time and you don’t use it responsibly, this credit score slumps for some months. So, if you want to rent a car on a credit card, then you should keep your credit score good.
Rental Car Companies’ Requirements for Credit Cards
- Credit Card Requirement:
- Most rental car companies require a valid credit card to rent a vehicle.
- Some agencies also accept debit cards, but specific conditions may apply.
- Credit cards provide added benefits such as insurance coverage and rewards.
- Payment with a Specific Card:
- To access associated coverage and benefits, you must pay the entire rental using a specific credit card.
- The primary driver (usually the cardholder) must use the card for payment.
- Declined additional insurance:
- It would be best to decline any additional insurance the rental car company offers.
- Using your credit card’s coverage is often more advantageous.
- Wait time and availability:
- The customer experience has improved, with reduced wait times for car pick-ups.
- Increased vehicle availability contributes to faster service.
Can You Use a Secured Credit Card to Rent a Car?
Yes, you can rent a car with a secured credit card. If you rent a car with a secured credit card, there are some policies of the company that are essentially to be followed. Some rental car businesses could use secured credit cards if their policies were fair. For renting a car, some companies even take traditional credit cards.
For your safety, you can also contact the car rental companies to ensure they accept credit cards. By contacting them, you can also gain other information and ask about their policies for using cards.
Some famous automobile companies accept credit cards
1: National
2: Alamo
3: Hertz
4: Avis
5: Thrifty
Pros and Cons Of Using a Secured Credit Card for Car Rentals
Using a secured credit card for car rentals has its own set of pros and cons.
Pros:
- Access to a vehicle: Renting a car allows you to travel and explore different destinations without relying on public transportation or other means.
- Build credit history: Using a secure credit card for car rentals can help you build or rebuild your credit history. Making on-time payments and keeping your credit utilisation low can positively impact your credit score.
- Opportunity for approval: Secured credit cards are generally easier to obtain than unsecured ones. If you have poor credit or no credit history, a secured credit card may be your best option for car rentals.
Cons:
- Limited acceptance: Not all rental car companies accept secured credit cards. This can limit your options when choosing a rental car company.
- Lower credit limit: Secured credit cards typically have lower credit limits compared to regular credit cards. If your credit limit is too low to cover the rental charges and potential holds on the security deposit, you may need to explore other options.
- Higher interest rates and fees: Secured credit cards often come with higher rates and fees than regular credit cards. Considering these costs when deciding whether to use a secured credit card for car rentals is essential.
Conclusion
In conclusion, the ability to use a secured credit card to rent a car depends on the rental car company’s policy. While some rental car companies accept secured credit cards, others may not. It’s crucial to contact the rental car company’s customer service directly or visit their website to confirm their requirements.
Article Sources
- myFICO. “Credit Checks: What are credit inquiries, and how do they affect your FICO Score?” https://www.myfico.com/credit-education/credit-reports/credit-checks-and-inquiries. Accessed July 8, 2021
- Experian. “Is a Credit Check Required to Rent a Car?” https://www.experian.com/blogs/ask-experian/is-a-credit-check-required-to-rent-a-car/. Accessed July 8, 2021
- TripSavvy. “Rental Cars: Credit vs Debit Cards” https://www.tripsavvy.com/pay-for-rental-car-with-credit-or-debit-card-2972875. Accessed July 8, 2021
- Alamo. “Car Rental Payment Options” https://www.alamo.com/en/customer-support/car-rental-faqs/credit-debit-payment-options.html. Accessed July 8, 2021
- American Airlines. “Avis terms and conditions” https://www.aa.com/car/avis/terms-and-conditions. Accessed July 8, 2021
