Before renting a car to an individual, most car rental companies require renters to provide their credit card, used to make a charge for the rental trip.
However, while doing this, you’d most likely be faced with having the rental company put a hold on your card for a security deposit.
While this might not be something to worry about, the amount held is dependent on the car rental company, the type of car rented out, your age, rental location, and a number of other factors.
With this, you can have the total amount of a security deposit skyrocket depending on the rental contract.
How Long Does Car rental Hold on Credit Card?
In most car rental companies, the hold on your credit card is released immediately after the rental car is returned.
However, on average it takes a maximum of 2 weeks for a rental hold to be fully recovered/unblocked depending on the rental company and the network service of your bank.
Some car rental companies might also decide to wait a few days, to make sure all hidden fees, fines, etc, are settled amicably, allowing the security deposit to serve its purpose.
It’s worth noting that rather than making an actual charge, most car rental companies pre-authorize a certain amount.
This allows the company to make a charge only when needed (usually after the rental period) and easily return the fund to the renter’s credit card without having to pay interest (which could have been allocated to the renter).
However, while this isn’t a charge, you can’t use the amount held to make any transaction unless the security deposit is refunded.
It’s also worth mentioning that there’s a chance that your security deposit might not be totally refunded if the following happens;
- You violate the company’s policy with requires a fine
- You’re charged a hidden fee (we’ve talked about this for some companies including Budget, Thrifty, Dollar car rental, and Turo)
- You damaged the rental car or parts
In any of the scenarios above, the security deposit would be reduced.
Depending on the severity of the policy violation, damage or hidden fee, you could be charged as little as a few dollars to as much as the whole security deposit fee.
This is the reason why we made a whole article on how to avoid deposits while renting cars.
Why do car rentals put a hold on credit cards?
Putting a hold on security deposits has over time become a traditional practice across most prominent car rental companies.
Simply put, car rental companies put a hold on customers’ credit cards to protect themselves a little, from the risk of renting out a car to a total stranger.
For instance, in the case of damage or an accident with a rental car, a renter might not be financially prepared to cover the expenses.
This is not the case when you already charged a security deposit, as the company would simply go to debit all charges needed for the repair of the car from the security deposit.
In essence, the hold placed on your credit card is simply a guarantor that tells the rental company that you’re capable of paying any charges that come up while renting the car.
What to do if the hold on your credit card isn’t released
While it should take a maximum of 2 weeks to get your hold released back to your credit card, in rare cases, you could fall into problems of not receiving the security deposit even after a 2-week interval.
Are there things you can do about it?
Well, yes.
Firstly, it’s advisable you check your bank’s end.
You can do this by generating a last 28 days statement of account for the account you provided to the rental company. You could also try contacting the Bank’s customer care, for a proper explanation.
Read also: Can you Add Insurance after Renting a Car?
If your bank isn’t able to detect any credit transactions from the car rental company, you can now contact the company.
Let them know that you haven’t received the security deposit back to your account, and see what they have to say about it.
It could be that they forgot, network issues or the security deposit was exhausted while on your trip. Whichever way, the car rental company should be able to provide a proper explanation of what must have caused the problem.
Final Thoughts
Most car rental companies have default systems for how they manage holds on customers’ credit cards. However, in general, security deposits are usually released within 2 weeks.
If you have a problem receiving your security deposit back to your account, it’s best you contact your Bank’s customer care and the rental company afterwards.
