Nowadays it is standard practice for most car hire agencies companies to require a credit card at the time of collecting the vehicle or booking online and many car rental companies will not accept debit cards or cash payments at the moment you sign the rental agreement. The most important reason is that the car hire company cannot process advanced charge approvals against debit cards, another reason is that they try to avoid handling cash at the counter. In essence your credit card is held as a security deposit against possible losses or damages to the rental vehicle.

When it comes to renting a car, there is a big difference between a credit card and a debit card so make sure that you present a valid credit card on the drivers name otherwise the counter staff may refuse to deliver the vehicle. In many cases the person whose name appears on the credit card has to be listed as an authorized driver on the rental contract and has to be present at the time the car is rented in order to sign the amount charged. This may cause additional charges in case the credit card holder is not the main driver and has to be listed as an additional driver, which is against a charge with many car hire companies.

Sometimes the rental company will not actually charge your card at the time you sign the rental agreement. Instead they will process and advanced charge approval for a certain amount which is blocked and no longer available against the credit limit of your credit card. With this procedure the car hire company is pre-authorised to charge a certain amount to your card for additional charges which may occur in the event the car is returned late or damaged while in your possession. Other additional charges which may apply are early return fees, mileage charges, peak season charges, additional driver charges, age penalties etc. Please bear this in mind if you are counting on your credit limit for the expenses during your holidays.

In other cases the car hire company will get your authorisation to charge your card if something does happen to the car during the length of the rental agreement or after the rental agreement has expired and the vehicle has not been returned.

When the rental vehicle is returned in perfect condition, nothing will be charged to your credit card except for the rental fee and additional charges like petrol, extra drivers etc. However, if the car is damaged, your credit card will immediately be charged. The amount which will be charged depends on the terms and conditions of your rental agreement. This charge is often referred to as loss damage waiver or collision damage waiver charge. Some credit card companies provide such coverage in which case you will normally have to pay the charge to the local car hire company and claim it afterwards. Make sure to have the necessary documentation when you present your claim, like original invoices, and that the invoice is issued under your name or the name of the credit card holder.