Is it wise to use a balance transfer credit card to allow a EU rental car company to hold the deposit?

Posted by _thetrue_SpaceTofu@reddit | AskUK | View on Reddit | 8 comments

We will be going on a trip to EU soon and already arranged a rental car. They made it clear that understandably they are going to need a credit card for the deposit. Would it be OK to use a balance transfer credit card? If I understand correctly, the amount for the deposit it is only allocated/frozen on the card and won't generate an actual transaction, therefore 1- we won't get stung by the high interest fees 2- we won't pay any currency conversion fee Are we all in agreement until now, I hope yes? However what happens if a damage is discovered upon returning the car? Will the credit card with the frozen amount be directly charged, or will it be possible for me to use a debit card? To note, I am aware that you can buy additional insurance to reduce the deposit, but I am not interested in that as I have a 3rd party insurance, which will of course refund me later on for the damage, but not any CC purchase fee or currency conversion fee.

Reply to Post

8 Comments

[-]

Mr_lovebucket@reddit

They will take a full month to refund you, that’s assuming they don’t find some reason to deduct something. On that note when you return the car and they say its fine you hand over the document with any damage marked on it that they gave you upon collection thus losing any proof. Make sure you photograph it before handing it back

[-]

_thetrue_SpaceTofu@reddit (OP)

Thanks for the very wise advice. However, I think that that document is anyway void, as I have found many more damages than the ones already stated on the document, which were already probably 20. When I remarked that, they just said take a video , then it's on video and it is the best proof. I thought at the time that this could lead to some uncomfortable situations, but I am hoping for the best

[-]

quenishi@reddit

If they insist on credit card instead of debit, highly likely it'll be a preauth. Debit cards it can end up a 'double charge' which customers complain about, so easier to say cc only. (The double charge happens due to debit often not supporting preauth - so the preauth causes a charge, then on capture another charge is generated and a refund issued for the original transaction. The refund isn't instant, so people get pissy over the double charge whilst the refund makes its way through the system). They would likely capture the preauth (i.e. charge the credit card) in the case they want the money. But you could ask the company what their policy is.

[-]

AddictedToRugs@reddit

If it's just a temp auth that drops off then you won't pay currency conversion fees as those are applied when the transaction clears. Likewise you won't pay any interest. What you need to be wary of is how payment allocation works on a credit card. If you have a balance transfer at a promotional interest rate (e.g 0% for 6 months) and you use your card to buy something, any payments you make to the card are going towards the balance at 0% first until it's cleared, and won't clear the retail balance. So in the event of a cleared retail transaction, yes you'd end up with interest. I rented a car from Europcar last year and they charged my card for the deposit and gave me a refund when I returned it - that means the transaction cleared and wasn't a temp auth. I've never seen any other car hire companies do that though; it's usually a temp auth that drops off automatically. They probably did this because it was an insurance rental that was likely to last for longer than a temp auth can remain active though.

[-]

_thetrue_SpaceTofu@reddit (OP)

thanks, very valuable info! Do you remember how long was you rental? I am renting for 10 days. I assume one doesn't have any way of knowing before hand whether it will be a temp auth or a retail transaction with subsequent refund? Unless the person at the rental car company counter is particularly clued up about, which I of course don't have hopes for that!

[-]

zephyrmox@reddit

A balance transfer credit card is just a credit card with a balance transfer offer available on it. It's not a specific type of card. The car co won't have a clue it's got an offer - they will just see a visa/mc credit card. The card will be charged - but they will tell you, so you can just pay it off from the debit card. The FX fee / charge will a few pounds at most - the least of your concerns when having to faff about claiming from your insurance if there is damage.

[-]

_thetrue_SpaceTofu@reddit (OP)

yes you are right, what I meant is that the balance transfer credit card (indeed being just a credit card) technically allows you to make a purchase, however when purchasing it comes with a high interest rate attached to it. So do I understand correctly that you had personal experiences of putting a deposit down on the credit card and in the event of a damage, you were able to pay for the damage using a different (debit) card?

[-]

AutoModerator@reddit

**Please help keep AskUK welcoming!** - Top-level comments to the OP must contain **genuine efforts to answer the question**. No jokes, judgements, etc. - **Don't be a dick** to each other. If getting heated, just block and move on. - This is a strictly **no-politics** subreddit! Please help us by reporting comments that break these rules. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/AskUK) if you have any questions or concerns.*