Can You Rent a Car With a Secured Credit Card?

A secured credit card requires a cash deposit that typically establishes its credit limit, serving as collateral for the credit line. This type of card is often used by individuals seeking to build or rebuild their credit history. A common question for those holding secured cards is whether they can be used for car rentals, which often involve specific financial requirements.

Using a Secured Credit Card for Car Rentals

Secured credit cards can generally be used to rent a car, provided they carry a major credit card network logo like Visa or Mastercard and function similarly to an unsecured credit card for transaction authorization. This means the card must have sufficient available credit to cover the rental costs and any associated security deposits. While secured cards are accepted, acceptance can depend on specific conditions set by individual rental agencies. These conditions often relate to how the card’s available balance interacts with the rental company’s authorization hold process.

Car Rental Company Policies and Authorization Holds

Car rental companies commonly implement an authorization hold on the payment card at the beginning of a rental agreement. This hold is a temporary freeze on a portion of the card’s credit limit, designed to guarantee payment for the estimated rental cost, potential additional charges, and a security deposit. For a secured credit card, this hold ties up funds from the cardholder’s deposit, reducing immediate available credit. For instance, if a card has a $500 limit and a rental company places a $300 hold, only $200 remains available.

The amount of this authorization hold varies significantly among rental companies and can depend on factors such as the vehicle type, rental duration, and specific location policies. Some companies may set the hold at the estimated rental charges plus a fixed amount, such as $200 to $500, or a percentage like 15% to 25% of the estimated rental charges. For example, Avis might require the rental amount plus a minimum $250 hold, while Hertz’s hold could be up to $200 in addition to the estimated charges.

Some car rental companies may treat secured credit cards similarly to debit cards for security purposes, which can lead to additional requirements. When using a debit card, companies often impose stricter policies, potentially requiring a credit check, multiple forms of identification, or proof of insurance. The release of an authorization hold can take several days to weeks, depending on the card-issuing bank’s processing times.

Preparing for Your Rental and Alternative Options

Before attempting to rent a car with a secured credit card, it is advisable to contact the specific car rental company directly. This proactive step allows you to confirm their current policy regarding secured cards, inquire about exact deposit amounts, and understand any specific requirements or restrictions. Ensuring the secured card has a sufficient available credit limit to cover both the estimated rental cost and the authorization hold is important. The hold will reduce the accessible credit on the card until it is released, which can take up to 30 days.

In situations where a secured credit card might not be accepted or presents challenges due to the authorization hold, alternative payment methods are limited. One option is to rely on a travel companion who possesses a traditional unsecured credit card and is willing to be the primary renter. Some rental companies may allow cash deposits, but this often involves a pre-qualification process, a non-refundable processing fee, and a credit check, making it a less convenient option. While secured cards are generally preferred over debit cards by rental agencies, if a secured card is not feasible, some companies may accept debit cards with additional scrutiny, such as requiring proof of a return travel itinerary or performing a soft credit check.