Can Secured Credit Cards Be Used to Rent Cars?

In order to rent a vehicle, you must be 21 years of age or older, have a valid driver's license, and provide an accepted form of payment. Each car rental company has its own terms when it comes to which payment methods they accept. Can secured cards be used to rent cars? Or do I need an unsecured credit card to rent a vehicle? Let's explore your payment options so you can prepare for your upcoming trip.

Can Secured Cards Be Used to Rent Cars?

You Can Rent a Car with a Secured Credit Card

Secured credit cards function just like traditional credit cards. They are accepted almost everywhere, including in-store and online purchases. So yes, secured cards can be used to rent cars. As long as there are enough available funds on the card to cover the deposit for the rental car, you shouldn't have issues with renting a car with a secured credit card.

Best Secured Credit Cards for Rental Cars

While most secured credit cards can be used for rental cars, some may be a better fit than others. Here is a list of some of the top secured cards for rental cars.

First Progress Platinum Prestige Mastercard® Secured Credit Card

The First Progress Platinum Prestige Mastercard® Secured Credit Card can be used for car rentals, hotels, dining, fuel, and other everyday purchases. The card offers a variable 9.99% APR and a $49 annual fee, and the credit limit can be as high as $2,000 with appropriate security deposits. The card reports to all three credit bureaus.

Assent Platinum 0% Intro Rate Mastercard® Secured Credit Card

The Assent Platinum Mastercard® Secured Credit Card offers 0% APR for the first six months, followed by a 12.99% variable APR. The card supports security deposits between $200 and $2,000, and it carries a $49 annual fee. Payments are reported to all three credit bureaus.

OpenSky® Secured Visa® Credit Card

The OpenSky® Secured Visa® Credit Card has a low $35 annual fee. The APR on the card is currently 17.39%. It reports to all three credit bureaus. Cardholders may be able to earn a slightl higher credit score within six months with timely payments.

Why Your Secured Card Might Not Be Accepted for a Rental Car

Most rental car companies put a hold on the card at the beginning of the rental agreement. This hold involves enough funds to cover the duration of the rental, plus a security deposit to cover potential damages. The card is not charged until the end of the agreement, but the hold prevents you from accessing those funds.

Because of this, your secured credit card will need to have sufficient funds to support the hold, plus whatever extra money you plan to spend. If the hold is for $500, you will need at least $500 available on the card in order to rent the vehicle. If you only have a limit of $200 on your secured card, you will be unable to use your card to rent the car.

The value of the hold will depend on the car you're renting, the rental company's policies, the duration of the rental, the cost of the security deposit, and other factors. If you are under the age of 25, the rental company will most likely charge a "youthful surcharge," which averages about $20 per day. Rental car insurance, mileage fees, and other expenses may further contribute to the hold amount. It may be wise to get an official, full-price quote from the rental company before using your secured card.

What Happens after the Rental Car Hold Expires?

The card hold may expire while the car is still in your possession. If so, the funds will be available on the card until you turn in the car. Then the card will be charged the actual cost of the rental agreement, minus the deposit (if refunded). Make sure you keep enough funds available in the account to cover the charges you'll incur.

If the hold is still active when you turn in the car, it may take a few days for the funds to be available in your account. The rental car company will officially charge your card for the vehicle agreement, but they will not charge any extra fees that were temporarily included in the hold. If your rental car cost $750 all included and the hold was $1,000, you should see $250 back in the account once everything processes.

Do You Need a Credit Card to Rent a Car?

You don't necessarily need a credit card to rent a car. Many rental car companies accept prepaid cards, debit cards, and even cash for payment. However, there are several factors to keep in mind before renting a car without a credit card:

  • The rental car provider may require a credit card for the deposit and accept a different card for the final payment. In other words, you don't have to make the payment with a credit card, but you need a credit card to secure the car.
  • Not using a credit card may limit your car selection. Having a credit card on file gives the rental company peace of mind that they can charge you for damages on the car. Using a debit card or other method puts the car provider at a slightly higher risk. Thus, you may only be able to rent the economy level or first tier cars without a credit card.
  • You may be subject to a credit check if you do not pay with a credit card. This allows the company to evaluate the risk of renting to you. If you have poor credit, bad credit, or a limited credit history, this credit check may reduce your chances of approval.
  • If you use two different cards, you may experience a longer hold time. The hold is canceled when you turn in the car. If you use Card A to secure the car and Card B to pay at the end, Card A never receives notification that the contract is over. They may hold your funds for up to 15 days until the hold officially expires. If you use the same card for the whole process, you should get your money back faster.
  • Your bank may deny a debit transaction. The rental car company has the right to refuse a method of payment, but your bank also has the ability to decline a transaction. If you plan to use your debit card to rent a car, make sure it fits within the bank's terms of agreement.
  • You'll need to pay a security deposit no matter how you pay. If the rental car company accepts cash or a debit card from the start, you'll still need to pay a security deposit to rent the car. Be prepared to have this money in addition to the cost of the rental contract. In most cases, the security deposit is between $100 and $300.
  • Accepted payments may vary by location. If you pick up a car at one location and drop it off at another location, the payment methods may not be the same. Many rental car companies have franchise locations, and the franchise owners can adjust their terms based on their needs. You should see consistency when traveling between corporate locations, but be aware of variations you may possibly occur.

Can You Rent a Car with Bad Credit?

It may be possible to rent a car with bad credit, poor credit, limited credit or no credit. Not all rental car agreements include a credit check, but many of them do. You may be asked to pay a higher security deposit due to your credit, or you may be able to bypass the credit check by using a credit card to fund the transaction.

Of course, this implies you have a credit card. How can you get a credit card with bad credit? Secured credit cards are easy to get approved for, even if you have past credit struggles, bankruptcies, or loan defaults. You provide a security deposit that acts as the line of credit for the card. If you deposit $1,000 onto the card, you have a $1,000 line of credit.

You'll receive a bill each month with a minimum payment amount and the total balance due (the cost of your transactions plus any fees you incurred that month). Payments are reported to all three credit bureaus, so you can build credit by making your payments on time each month. If you pay off your balance in full before the grace period is over, you can avoid paying interest on the balance.

You can get a secured credit card with bad credit, as well as rent a car with a secured credit card. Thus, you can rent a car with bad credit, as long as you have the right components in place. Compare secured cards here on Secured Card Choice to find the ideal card for your specific needs.