Car rental abroad: be careful with your bank card!

26 May 2022
Car rental abroad: beware of this debit and credit card scam - Luxembourg

This is a common situation in some tourist countries. Holidaymakers book a car rental in advance of their trip. When they arrive and pay the deposit, the car rental company refuses to accept the card used and requires the payment of several hundred euros in insurance to make the car rental. Holidaymakers refuse and are never refunded the amount of their reservation.

Unfortunately, this situation is becoming increasingly common, especially in countries outside the European Union. So if you are going on holiday soon : be careful not to leave out this little detail when you book your car...

Book a car rental with the right credit card

The reason for these situations and the development of these "additional insurances" is simple: unlike the European rental companies, most car rental companies worldwide do not accept debit cards. In Europe, however, we mainly use debit cards! Just to refresh your memory :

  • Debit cards, as their name suggests, allow your account to be debited directly with each payment. When your account balance is zero, you can no longer pay.
  • Credit cards allow you to 'extend credit' to your bank for certain purchases. At the time of payment, you choose whether you want to pay in cash, or pay by credit. If you pay by credit, the bank lends you money to make your purchase. You will have to pay back this money with interest.

However, in Western Europe (Luxembourg, Belgium, France), credit cards are not very common. Perhaps because culturally, people are more reluctant to go into debt to make a purchase! In addition, there is a major confusion: we speak of "credit cards" to actually designate "debit cards". Let's get back to the subject of renting a car abroad.

Why you should use a credit card when renting a car abroad

With the exception of a few companies located throughout Europe (such as Hertz, Sixt, Enterprise or other rental companies in their European branches), all rental companies will ask you for a credit card to block the vehicle deposit on your account.

This will make it easier for the hirer to recover this amount in the event of an accident or damage to the vehicle. They will be able to claim the deposit from your bank account, even if the balance is zero or negative, because the bank will have made a credit in your name. You will therefore have to repay this sum with interest.

This is much more convenient for car rental companies, which have encountered many problems with bounced cheques and have tightened up their conditions for car rentals. Therefore, if you have a debit card on the day you pick up the car, you should be able to pay with a credit card, some rental companies ask you to pay a very expensive additional insurance (several hundred euros). This insurance is intended to protect the professional and allows him to cover himself in case of damage to the vehicle, while renting the car to you. But this greatly increases the cost of your rental, as you will never get this money back.

A credit card, at the right price

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How do I pay a deposit to rent a car without a credit card?

If you don't have a credit card to pay the deposit for the car outside the EU, and you don't want to pay these additional insurances either, you have two options:

  1. You can apply for a credit card to your bank before you go on holiday. They will be able to deliver it to you within 1 to 2 weeks (or even sooner if necessary).
  2. In some cases, you can pay the deposit by SEPA bank transfer. However, not all rental companies accept this option. Make sure you check this option beforehand. And after the rental period, you should remember to check that the rental company returns the deposit to you by bank transfer once the vehicle has been returned.

We advise you to choose a bank account that offers a credit card as part of its current account This will give you peace of mind for your trip and for all future trips!

Check the information on car rental websites

With the development of this type of situation, booking sites have made great efforts to improve the understanding of how car rental works. Most sites now display an indication of the conditions of payment of the guaranteefor each vehicle. Some even offer options to pay the deposit in advance.

We advise you to check this information on each site before booking your vehicle.

Beware of the insurance offered for a car rental abroad

Unfortunately, as everywhere, some renters take advantage of this lack of understanding or ignorance of some consumers to make a profit. Some sell additional insurance at a high price, even if holidaymakers have already paid their deposit with a credit cardThis is the case even if they are already covered against these risks elsewhere.

As a matter of principle, take the time toanalyse the conditions of each insurance policyYou should also consider whether it is worth the price. To be on the safe side, we advise you to rent your vehicle from companies known to the general public and well established in Europe. This will minimise the risk of scams or forced sales, which can occur in tourist environments.

Credit card insurance specific to car rental

You may not know it, but some bank cards offer specific insurance for car rentals. Some Gold cards, for example, cover your personal injury as well as the damage to the vehicle in the event of an accident during your car rental. This gives you peace of mind, and you won't need to take out any additional insurance at the time of rental.

In addition, these Gold or Platinum cards are often credit cards, which also solves the problem of paying a deposit to the rental company.

If you wish to benefit from this, the best option is to opt for a Premium bank account in Luxembourg. This means you'll have a whole range of insurance, Gold or Platinum bank cards, and good rates on your loans, credits and overdrafts. And all year round!

A better bank card

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Some tips if you are renting a car abroad...

If you are in the process of booking your next trip, here are some tips:

  • Book your car as soon as possible
  • Use a price comparison tool such as Rental Cars, Carigami, KAYAK (or others)
  • Prefer to rent a car from a reputable rental company (Hertz, Sixt, Enterprise, Thrifty, etc), which has a good customer satisfaction (you can see the rating of the rental company on the comparators)
  • Take out comprehensive supplementary insuranceThe insurance will cover you in case of damage to the vehicle and can buy back your excess (but be sure to read the conditions). The insurance will cover you in case of damage to the vehicle and can buy back your excess (but be sure to read the conditions). This will give you peace of mind during your stay.

And at the time of your holiday:

  • Before taking the vehicleMake sure you check the interior and exterior of the car, and especially take photos of all sides of the car. This way you can prove that the damage was already there, if you are accused of it when you return the car.
  • When returning the vehicleRemember to fill up the car with petrol! You may be charged for any extra litre of petrol if you have not returned the vehicle at the contractually agreed level.

And above all: enjoy your holiday! 🙂

Frequently asked questions (FAQ)

Which car rental companies accept debit cards?

The major European car rental companies (Hertz, Sixt, Avis, Enterprise, etc.) generally accept debit cards, but only in certain EU countries. Outside these countries, you will need to pay for your booking and deposit with a credit card.

How to rent a car without a credit card?

If you want to rent a car without a credit card, you can pay the deposit by SEPA transfer to the car rental company. However, not all car rental companies accept this method. If in doubt, we strongly recommend that you use a bank account that includes a credit card. There are several in Luxembourg.

Which car rental insurance for credit cards?

Some bank cards (e.g. Mastercard Gold) offer insurance that covers personal injury and damage to vehicles when you rent a car. This means that you don't need to take out additional insurance to cover you in the event of an accident or damage to the vehicle. To avoid any unpleasant surprises, be sure to check the terms and conditions of your card before you travel abroad.

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