Debit cards and car rentals

I understand some will let you use debit cards, but did you know they can block your entire checking account? They often authorize for wayyyyyyyy more than you actually pay to rent the car, just in case you keep it longer, and owe them more. So, your checking account is blocked for the amount they authorize, not for the amount you actually pay. You don't want to do it, unless you can afford to wait for the money in your checking account.

For example, I rented a car for three days when I flew to Dallas last year. They authorized almost $500 on my AmEx card, and since they didn't release it, it stayed there for 2 weeks. My actual bill was about $70.

I would have been pretty unhappy if it had been my checking account.

 

Exact-a-mundo, Breeze-o!


When you rent a car, they 'authorize' your card for wasy more than the piddley $19.95 you are going to be driving. Depending on the length of time you are renting, the amount will most like be several hundred dollars.

Now, while 'Debit' Cards that carry the V/MC logo adhear to mostly the same rules as the Credit Cards you carry, they do have their differences.

First, think of things this way. Your 'Debit' Card is secured by 'real' money. When your card is swiped and 'authorized', a hold is immediately placed on that amount of funds.

Your Credit Card is based on 'Virtual' money, a credit line you have established with that financial institution. When you credit card is swiped and authorized, a 'hold' is placed against your credit limit. Because no 'real' money is involved, this hold may be a little more 'flexible'.

Big deal, right? Not exactly. The 'real money/virtual money' situation creates another issue.

Authorizing a Credit Card is only one step of the process. You will not get paid by simply 'Authorizing' a card, you only get paid when you actually process the charge.

Did you ever notice that some charges do not show up on your credit card statement until several days afterwards? And sometimes the date of purchase does not match the actual date? This is because most businesses process all thier cards at once. This is called running a 'batch'.

Imagine being a store like Wal-Mart. Across the country, you most likely 'authorize' 100 transactions a minute. If you had to process all those transactions at the time of process, the lines would stretch from the checkout counter through the Hallmark aisle, down past kitchen wares- and during the Holidays most likely go all the way back to automotive!

Anyway, it is much easier to run process all the authorizations in one 'batch' fom a central location. It's also more secure and most likely cheaper (as a lot of banks charge a fee for every batch).

</tangent>

Ok, so authorizations are the first step (the authorization is just a guarentee from the CC company that the merchant can charge up to that amount). Now, imagine your card is authorized for one amount but charged a smaller amount- or no amount at all (Like at a rental car counter). With Credit Cards and their 'virtual money', that authorized amount simply drops away. It's not a big deal as the money never really 'existed' in the first place.

However, with a Debit Card, the Bank has real money at stake. The authorization is treated different and may stay valid for up to 30 days. The hold mount, i.e. YOUR MONEY, will NOT be available to you during this time.

Now, take the rental car company example. You rent a car for three days at $50.00 a day. Simple, a $150.00 charge, right? Well, yes, in the end when you return the car. BUT, in the meantime, they are going to authorize your card for $450.00 in case you keep it for a week, play Evil Kneivel and burn all the rubber off the tires, and spill a 32oz slush puppie in the back seat. They want to know ahead of time that, when they need to charge you $400.00 instead of that $150.00, your card is going to be good for it. Hence, the authorization.

Now, they did take 'Debit' Cards at first. BUT, can you imagine how many calls they got from irate people whose ATM cards were swallowed up by the machine at Disneyland because all their funds were 'authorized' by the rentl company? How about the calls when, two weeks after the rental, people had holds for 300.00 on their checking account when they only charged $75.00 at the rental company?

There is also a matter of insurance. While Debit cards that carry the V/MC logo are required to follow the rules/laws governing V/MC Credit cards, there have been a few special priviliges developed for banks to protect them regarding disputes, etc.

For a while, when Debit Cards were first becoming available, there was another problem. Say you went and bought a $500.00 item at the mall, then returned it two days later because you changed your mind. Your $500.00 refund could also take up to 30 days to be 'processed' by the bank. If you had used a 'credit card', your refund would have (in most cases) shown up much quicker.

Hope that helps!


Shawn

 

Same thing just happened to me when I rented witn a debit card at National. They put a $500 hold on my checking account for a week after I turned in the car. Annoying.

 

LOL, we had a story on the local news here, not too long ago, where a lady used her debit card to buy $5 worth of gas at a discount gas station.

The pump terminal was set up to authorized $300 per purchase!!! Don't ask why - I think they said they deal with a lot of trucking companies.

The lady's $300 was still being held when her mortgage payment and car insurance premiums bounced. That was the first she knew about it.

That gas station got some of the worst publicity you ever heard!!! The TV stations were climbing all over them, and the poor clerks were hiding out in their booth, afraid to even look up.

Ut oh!! - off topic - I am going to have the healthiest dishes in town. Mom just dropped all her vitamins into the dishwasher (instead of the soap) and then turned it on!!! ROFL. She's a trip!!!

 

another thing about authorizations......


There is a company downtown (Atlanta) that processes charge card authorizations. The average rate???????

650 transactions a second. WOW.

I forget what the max is, but I can find out.

Every computer in the authorization chain must have the exact same time (to the millisecond) for proper processing. To keep things in line they have a direct fiber line from the Atomic Clock at the Naval Observatory with backup antennas on the roof.

Equifax is right downtown too....now if they would just become a client I could do some 'real' credit fixer-up'ing....hmmmmmmm.....

<grin>

Shawn

 

I had a problem with a certain RAC company Starts with A and ends in S...kinda sounds like Mavis. Anyway I reserved a car on my ATM/Mastercard. I ALWAYS use it as a MC. Well when I got to the place, they refused my card. Can't use it cause its an ATM card. I screamed and yelled that it is used as a MC, the guy wouldn't budge. So I tried my other MC and I was $2 short from reserving the car. I ended up spending 45 minutes on the phone with my MC company trying to get a measly $5 increase. (the jerk at the RAC wouldn't let me use his phone. To make matters worse I had 2 screaming BABBIES, a grumpy hubby and it was Memorial Day weekend in ORLANDO! I won't be going back to them.
KHM

 

Wanna hear something else funny?

My first 'real' job after college...a tech firm outside of Boston....They sent me on a trip my first week. I was soooo impressed as they had someone that made all my arrangements for me and all....made me feel all important right out of college LOL!

Anyway, I jump on the plane and go to Saginaw, Michigan. Get my bags, to the rental company, and DENIED! Not my card, mind you, the company had a card on file that does the charges. I was denied because of my AGE. You had to be 25 to rent a car!!!

My company had to fax over a 'permission slip' claiming responsibility should something happen. How embarassing! Talk about deflating an ego really quick!

It's always something...

Shawn

 

BUDGET takes debit cards and regular CCs.
The number scheme is the same on all debit cards - regardless of the "brand name."

AMEX has 15 digits - the AMEX Membership Bank Card has 15 digits.

VISA/MC - 16 on all variety of cards.

Hope this helps - dogman

 

Interesting stuff SS! I build backbone infrastructure
for one of the world's largest networks.

Your transaction information is fascinating.

Later - FYI - Atlanta huh? Geez, with my networks, I was ABLE TO READ YOUR EMAIL across the country - gosh in San Francisco, California!

I can even send video email - but at my company, my major project concern now is how to bring HIGH DEFINITION bandwidth to every desktop.
I can already do it, (and Samsung already has a high definition monitor available) but I need to find how to do it and make a profit. Currently the test
development costs are huge.

EX:
Click into XXX network edge.
Click on new movie releases.
Select your first-run movie movie, authorize your card on file at gateway.
Select time for start.
Movie is delivered to your PC, cache stored - yes cache stored - until your run time.

THE NEXT DAY:
You discuss the latest flick with friends.
Sean, you of course noticed that I plan to bypass
theaters, Blockbuster Video, etc - by DIRECT DELIVERY OF ALL NEW FILMS to the consumer.

Theaters will always be around because of their
big screens, etc.

BUT - in the next yr or two - is is likely that we can
see an actual HOLLYWOOD PREMIERE - beamed directly from the source.

We will have the choice of driving to the theater, or snapping it at home.

its fun stuff - dogman

 

I used to rent frequently with a debit Visa card (X.com-- Boo!! Hisses!!). It didn't say it was a debit on the card, and when they would ask me if it was a debit card, I would say "No, see it says Visa right there." As long as I had enough money in the account to cover the Hold, I left with a car. I found that different rental car companies handle the Hold differently. Most (Budget, Enterprise, Dollar, National, Hertz) would Hold at LEAST $250 on my card, regardless of the fact that was renting a $30 a day car for two days. However, two, Alamo and Avis, would only put a Hold for the expected amount of the rental plus about 10 percent. So guess where I rented my cars from for a long time? I still usually do, especially if I'm travelling a lot, because all those holds can add up. I have a company AMEX with a $4000 limit on it. A while back I had five trips over three weeks. Towards the end of the third week, I went to rent a card, and found that I couldn't rent anything. I had just paid off the balance over the weekend online. I called AMEX and they said that because of all the unreleased holds from hotels, rental car companies, even gas stations, my credit line was all spoken for, even though it was paid off. I had to call two hotels that I had stayed at recently and who had not released their holds, and which totaled over $1500, to beg them to release the holds, which, fortunately, they did. It took another couple of weeks for all the holds to fall off.

 

Dog-

Seriously, email me. I have something you need to see. If it's you, we might have been working on the same project.

Shawn

 

hey - try snapping dogmansf@aol.com - dogman

 

Avis are the Cross Country Bank of the car rental industry. My experience with them has been horrible, no less. I will never do business with them again. "We try harder", ay?


Saar

 

I haven't had any trouble with AVIS...

I use one card to "RESERVE"...another card to PAY...

CHECKING CARD FOR CAR RENTAL IS BAD BECAUSE IF YOU HAD $400.00 IN YOUR CHECKING ACCOUNT AND THEY "RESERVED" $400.00 YOU WOULD BE IN "BOUNCE" MODE IF YOU TRIED TO USE THE CARD FOR $5.00...EVEN IF THE RENTAL WAS GOING TO TOTAL $200 +/-...

You could even pay with another card, or cash and have to pay for "BOUNCED" check charges even though you NEVER DID!!!!!!

 

I reserved a car yesterday online with Alamo. They didn't charge anything to my card yet. Wonder if they will do it when I pick up the car? And if they do, I wonder if I'm gonna have to put it on 2 cards. HHHHHhhhhmmmmmmmm.

 

Erica-

they will probaby not authorize the card until you go to pick up the car. I have reserved on my Amex (online and through the phone) several times then had the authorization 'declined' by Amx until I called in (multiple charges in multiple cities in one day, sets off the fraud alarm- They are almost as bad as ATT mobile that way). One reason is the amount can vary depending on the car you get (rarely the car you reserve as they overbook, cars are 'stuck' in middle if return pile, etc) and the options you pick (insurance, etc).

How soon is this? Can you move money around to avoid the multiple card issue? Also, you can always try calling in for an 'emergency travel' credit increase- especially due to funeral, sickness, etc. While the increase might be temporary and only good for travel, it will get you through this situation.

Amx is good about his. We use Amx Corp at work. One of my good friends had his 'shut off' twice in 6 months (they are quick to shut cards off). Because of that they 'capped' him at $200.00 for 'retail' and '1000.00' for travel based charges. Neat how they can tell the difference.

Well, we had to go to NY and the only rooms we could get were at the Marriot Marquis (too bad, huh?). Well, at 440.00 a night that 1k didn't go far. He called in and they gave him a 'temporary' travel limit increase for the two weeks we were there. They even called the hotel to verify the reservation.

Anyway.....

Hope this helps.

Shawn

P.S. For you frequent travelers....Avis has a pretty crappy reward program but they upgrade you quicker even without 'status'. They are usually GM cars.

Hertz (who I try to use the most as I have had the best luck with) has a crappy rewards program as far as points/miles but their status program is great. I hit presidents circle last year and they have treated me well. Almost always upgraded- AND, they have a 'prestige' collection where they will upgrade you to a Jag...yeah, baby! Upgrades without status are almost impossible and their compacts usually suck.

Dollar has a wimpy sounding name but has pretty good service and you earn stuff quick. I got a Ping putter after 10 days...that was one trip! They are just harder to find sometimes.

 

Hell, at the price of a small box of CASCADE dishwasher detergent, vitamins could be cheaper - and last 30 days - once each day of course..

arooo! dogman