We’ve all been there. You’re at the rental car counter, trying to check out after a long day of travel, and the agent asks if you want to add a surcharge to your credit card for a “hold” on your account. You politely decline, but they insist, telling you it’s just a formality and you’ll get the money back when you return the car.
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Reluctantly, you agree, only to find out later that your credit card was charged $200 or more. What gives?
Here’s the thing: when you rent a car, the company puts a “hold” on your credit card account for the estimated amount of the rental (plus a little extra for insurance and other charges). This is a way of making sure you don’t skip out on the bill.
However, some rental car companies (Dollar is one of them) have been known to put an excessively high hold on your account – often more than the actual cost of the rental. So when you return the car and they process your final charges, you end up getting a refund for the difference.
While this may not seem like a big deal, it can cause problems if you don’t have enough available credit on your card to cover the hold. This can result in your card being declined, or you may be hit with an overdraft fee if you have a checking account linked to your credit card.
The good news is that there are a few things you can do to avoid getting hit with a high credit card hold from Dollar (or any other rental car company).
Pay with a debit card.
If you use a debit card to pay for your rental car, the company will usually only put a hold on your account for the actual amount of the rental (plus any taxes and fees). This means you won’t have to worry about a refund later, and you won’t have to worry about having enough available credit on your card.
Use a credit card with a high credit limit.
If you use a credit card with a high credit limit, you’re less likely to have problems with a hold. This is because the company will only put a hold on your account for a small percentage of your total credit limit.
For example, if your credit limit is $5,000 and the company puts a hold of $200, that’s only 4% of your total credit limit. However, if your credit limit is only $1,000, that $200 hold is a much larger chunk – 20% of your total credit limit.
Use a credit card that offers “cash back” or other rewards.
Some credit cards offer rewards like “cash back” or “points” for every dollar you spend. If you use one of these cards to pay for your rental car, you may be able to offset the cost of the hold with the rewards you earn.
For example, if your credit card gives you 1% cash back on all purchases, you’ll get $2 back for every $200 that’s put on hold.
Ask the rental car company to lower the hold amount.
If you’re concerned about having a high hold placed on your account, you can always ask the rental car company to lower the amount. They may not be willing to do this, but it’s always worth a try.
Pay with a prepaid debit card.
If you’re really worried about getting hit with a high credit card hold, you can always use a prepaid debit card. These cards can be loaded with a specific amount of money, and they can be used just like a regular debit or credit card.
The only downside to this option is that you’ll need to load the card with enough money to cover the cost of the rental, plus any taxes and fees.
The best way to avoid getting hit with a high credit card hold from Dollar (or any other rental car company) is to pay with a debit card. However, if you don’t have a debit card, you can try one of the other options on this list.