A couple month ago, we wrote about the dangers of using debit cards to make purchases at gas stations. Unfortunately it turns out that many of those same dangers apply when using debit cards for car rentals as well. Not only that, additional risks apply. Since people are increasingly using debit cards to make purchases and since many car rental companies will accept payment in the form of a debit card, the risks are worth being aware of.

The problem for consumers arises when the car rental company puts what is usually called an “authorization hold” on the debit card during the time of the car rental. This amount varies depending on the rental company and type of car, but is usually between $200 and $400. Although the money is usually refunded to the account (unless the car is damaged or unreturned), on a debit card this refund may not occur as quickly as expected. It can take some banks weeks to release funds back to your debit card account.

Credit cards have built in measures to protect consumers from this problem by allowing merchants to apply a “hold” on the funds without actually passing the transaction. This allows car rental companies to verify that you have funds available without actually charging you to prove it. With a debit card this is not the case.

The second issue to be aware of is the “daily spending limit” on the debit card being used. Between the “authorization hold” and the actual cost of the rental can be easy to rack up over $1000 in expenses. If the amount of the car rental exceeds the debit card spending limit set by the bank issuing, using a debit card would not be possible.

At the end of the day, if you must use a debit card to make a car rental be sure that you have more than enough money in your account to do so, and that you will not be requiring the “authorization hold” to be returned to you for a couple weeks.