Why do car rental companies prefer/require credit over debit cards?
A hotel can accept the debit card because each night they can withdraw the money. If you don't have sufficient funds they can instantly lock you out of your room. They an also limit your ability to access room service, and other extra expensive options. The rental car can't do that once you have the car. Plus they never know if you will bring the car back with damages, toll charges, and an empty tank of gas. Deposit on a Debit Card have a different effect, and many people don't understand it (and make a big stink), or cannot afford it (or both). Either of it results in lots of trouble for the business: In addition, having a credit card showes that some bank trusts the customer with an unsecured credit of this height, which is some reassurance for the business. A debit card proves only that he was able to get a checking account, which needs much less liquidity and stability. People with credit cards tend to have better credit than those who only have debit cards. People with better credit tend to not abuse such things as car rentals. It costs money for any company to run your credit. It doesn't cost a rental company any outflow of money to reject debit cards. So the possession of a credit card becomes a stand-in for running your credit before you rent a car. I am not sure if this is the actual reason or not, but all of the major credit cards (Visa, Mastercard, Amex, Discover) provide damage insurance coverage on car rentals. Debit cards do not usually provide this coverage. So, if you use a credit card, the car company knows it will be able to recover the cost of any damage to the car.  Of course, this doesn't explain some of the odd debit card policies out there. For example, Alamo will not let you use a debit card unless you provide proof of round trip travel (like a plane or cruise ticket). But you can use a credit card without having a travel ticket. I'm not sure how having a travel ticket makes debit card users less of a risk, but apparently it does somehow. A few reasons make sense: They have a defined process for rentals, risk assessment, and customer credit. Especially for a large corporation, making changes to that process is not trivial, adds risk/uncertainty, and will be costly. Such changes for a relatively small customer base might not makes sense. Many rental companies DO allow you to rent with a debit card. Why do some businesses take cash only?  With a debit card, there is no third party guarantee. With a credit card, the cash is coming from a well-established third party who will pay (assuming no disputes) and has a well-established history of paying. Even if the merchant holds your account, it is still your cash under the control of you and your bank until the deposit clears the merchants bank. It is not surprising they view that as more risk and potentially not worth hassling with debit. I have looked at the conditions of a car rental company, and I believe it provides the answers: Upon pick up of your vehicle, you must present a valid credit card (*)   used to make the booking and which must be in the driver´s name. If   you do not have a valid credit card we will accept your debit card   when you pick up your vehicle. However, as we cannot reserve credit to   cover the potential damage or refueling costs, you will need to take   SuperCover and a fuel tank of fuel at the start of the rental. We will   refund the value of the unused fuel at the end of the rental unless   otherwise agreed with you. (*) VISA, MasterCard and American Express   are accepted. Credit card or Third Party Insurance IMPORTANT: In case of damage, we   will charge you the incurred amount up to the excess. You will then   need to reclaim this amount from the provider of the credit card or   third party insurer. We strongly recommend that you fully read and   understand the terms and conditions of any cover provided by your   chosen provider before you decline any of our optional services.   Without our SuperCover, should you damage the vehicle during your   rental period, we will charge you the corresponding amount up to the   excess, regardless of whether you can subsequently reclaim this amount   from the provider of the credit card or the third party insurer. In   the event you would like to dispute any of the above mentioned charges   you should send your request by mail or email to the Firefly location   state on your rental agreement. https://global.fireflycarrental.com/qualifications-ES.html From that, we can conclude that : It's likely that disputes with customers in case of damage cost a lot to car rental companies, and for the 2 above reasons, demanding a credit card may alleviate it.
It will depend on credit they are offering you during the period being covered. A gas station locks up what they expect is the maximum transaction for most people. When the prices of gas spikes some people have the pump turn off before the tank is filled, therefore they need to use a 2nd card to complete the purchase. Before you arrive at a hotel they lockup the cost of one night in the hotel, that way they still sell the room for one night if you never show. While you are there they lockup the cost of what you could owe them. This would include the cost of the room, and average room service or bar service.  For a car rental, it would be based on the risk they perceive. They don't want to try and collect against a card you gave them when you reserved the car, or when you picked up the car, only to find that you have gone over the limit.  Some online systems will let you see what is pending against your card. Others could provide that information to you over the phone. Financial problems are often due to budget (income statement) issues, either caused by excessive expenses or too little income. You state your income at $115K (pre-tax?), which is much larger than median income. But you do not supply (all) expenses, other than state that you have debts that require large payments, and that you are doing well budgeting (which is hard to accept based upon the large debt load). Though you do not mention specific card amounts, interest rates, and options you have considered for addressing these balances, you do suggest that you understand the problem, and want to pay the credit cards off. You have a large amount of debt comprised mainly of large credit card balances. There are no easy solutions for high credit card debt. This is a problem that you need to learn how to manage, and the costs that you incur when you allow easy credit to chain you to service to the credit card companies. Rather than sacrifice your future, look to finding ways to fix your present situation, which is tough. Try to find a way to dig out of the debt, which will take several years. Lets put this debt in perspective - consider that a five year (60 months) plan to repay the debt will require paying > $1000/month towards principal (plus the interest on all the cards). Difficult, but not impossible.  You also mention two cars, with $375/month on one car, $unknown/month on the other car.  Plus you mention $500/month for private school. Since the debt is a balance sheet problem, do you have any assets you can sell to payoff some of the debt? Can you sell your cars and obtain cheaper vehicles that have smaller payments? Can you examine you budget and find areas where you can save? When you were making $75K/year or $30K/year, you certainly had lower expenses and a smaller expense budget - can you reduce your expenses to a more modest level? Can you go on a 'budget diet'? This would be the advice Dave Ramsey (and others) would give. You probably have $6400/month income (net after taxes), which using the LearnVest approach would give you three budget categories. Modify the approach to allocate more for financial priorities (paying down debt) until you have the credit cards under control. I have estimated below, Essentials (50%, $3200) Financial (30%, $1920) Lifestyle (20%, $1280) Some suggestions, The Debt Snowball approach works. Driving a cheaper car works. Scaling back on monthly lifestyle expenses works. Slash your expenses for a year - cut back on everything, and pay off some of that debt. You really need to manage this situation with a focus on reducing that unsecured debt to a manageable level. Consider a reputable debt repayment plan. "A credit card is a way to borrow money. That's all. Sometimes the loans are very small - $5 - and sometimes they are larger. You can have a credit card with a company (bank or whatever) that you have no other relationship with. They're not a property of a bank account, they are their own thing. The card you describe sounds exactly like a debit card here, and you can treat your Canadian debit card like your French credit card - you pay for things directly from your bank account, assuming the money is in there. In Canada, many small stores take debit but not credit, so do be sure to get a debit card and not only a credit card. Now as to your specific concerns. You aren't going to ""forget to make a wire."" You're going to get a bill - perhaps a paper one, perhaps an email - and it will say ""here is everything you charged on your credit card this month"" along with a date, which will be perhaps 21 days from the statement date, not the date you used the card. Pay the entire balance (not just the minimum payment) by that date and you'll pay no interest. The bill date will be a specific date each month (eg the 23rd) so you can set yourself a reminder to check and pay your bill once a month. Building a credit history has value if you want to borrow a larger amount of money to buy a car or a house, or to start a business. Unlike the US, it doesn't really have an impact on things like getting a job. If you use your card for groceries, you use it enough, no worries. In 5 years it is nice to look back and see ""never paid late; mostly paid the entire amount each month; never went over limit; never went into collections"" and so on. In my experience you can tell they like you because they keep raising your limit without you asking them to. If you want to buy a $2500 item and your credit limit is $1500 you could prepay $1000 onto the credit card and then use it. Or you could tell the vendor you'd rather use your debit card. Or you could pay $1500 on the credit card and then rest with your debit card. Lots of options. In my experience once you get up to that kind of money they'd rather not use a credit card because of the merchant fees they pay." "In this answer, I won't elaborate on the possibilities of fraud (or pure human error), because something can always go wrong. I will, however, explain why I think you should always keep receipts. When the (monthly or so) time comes to pay your credit card bill, your credit card company sends you a list of transactions. That list has two primary purposes, both of which I would consider equally important: While for the former item, a receipt is not necessary (though it certainly does not hurt showing the receipt along with the bill to provide further proof that the payment was indeed connected to that bill), the latter point does require you to store the receipts so you can check, item-by-item, whether each of the sums is correct (and matched with a receipt at all). So, unless you can actually memorize all the credit card transactions you did throughout the past one or two months, the receipts are the most convenient way of keeping that information until the bill arrives. Yes, your credit card company probably has some safeguards in place to reveal fraud, which might kick in in time (the criteria are mostly heuristical, it seems, with credit cards or legitimate transactions here getting blocked every now and then simply because some travelling of the actual owner was misinterpreted as theft). However, it is your money, it is your responsibility to discover any issues with the bill, just as you would check the monthly transaction list from your bank account line by line. Ultimately, that is why you sign the vendor copy of the receipt when buying something offline; if you discover an issue in your list of transactions, you have to notify your credit card company that you dispute one of the charges, and then the charging vendor has to show that they have your signature for the respective transaction. So, to summarize: Do keep your receipts, use them to check the list of transactions before paying your credit card bill. EDIT: The receipt often cannot be replaced with the bill from the vendor. The bill is useful for seeing how the sum charged by the respective vendor was created, but in turn, such bills often do not contain any payment information, or (when payment was concluded before the bill was printed, as sometimes happens in pre-paid scenarios such as hotel booking) nondescript remarks such as ""- PAYMENT RECEIVED -"", without any further indication of which one of your credit cards, debit cards, bank accounts, stored value cards, or cash was used." You know those perks/benefits that you don't want to give up? Those are funded by the fees you are trying to eliminate by paying cash. The credit card company makes money by interest, merchant fees, and other fees such a annual fees. They give you perks to generate more transactions, thus bringing in more merchant fees. For a small business they need to balance the fee of the credit card transaction with the knowledge that it is convenient for many customers. Some small businesses will set a minimum card transaction level. They do this because the small transaction on a credit card will be more expensive because the credit card company will charge 2% or 50 cents whichever is larger.   Yes a business does figure the cost of the cards into their prices, but they can get ahead a little bit if some customers voluntarily forgo using the credit card. "Until the CARD act, credit card rules required that merchants had no minimum purchase requirement to use a card. New rules permit a minimum but it must be clearly posted.  Update - Stores can now refuse small credit card charges is an excellent article which clarifies the rules. It appears that these rules apply to credit, not debit cards. So to be clear - the minimum do not apply to the OP as he referenced using a debit card.  ""Superiority""? Hm. I'd be a bit embarrassed to charge such small amounts. Although when cash in my wallet is very low, I may have little choice. Note, and disclaimer, I am 48, 30 years ago when I started using cards, there were no POS machines. Credit card transactions had a big device that got a card imprint and the merchant looked up to see if your card was stolen in a big book they got weekly/monthly. Times have changed, and debit cards may be faster, especially if with cash you give the cashier $5.37 for a $2.37 transaction, but the guy entered $5 already. This often takes a manager to clear up." There are many gas stations where I live that already have different prices if you pay for cash vs. credit.  In addition, some small businesses are doing this as well.  My wife bought a birthday cake from a bakery.  If you paid with cash, you saved 5%. "You are correct.  Credit card companies charge the merchant for every transaction.  But the merchant isn't necessarily going to give you discount for paying in cash.  The idea is that by providing more payment options, they increase sales, covering the cost of the transaction fee.  That said, some merchants require a minimum purchase for using a credit card, though this may be against the policies of some issuers in the U.S. (I have no idea about India.) Also correct.  They hope that you'll carry a balance so that they can charge you interest on it.  Some credit cards are setup to charge as many fees as they possibly can.  These are typically those low limit cards that are marketed as ""good"" ways to build up your credit.  Most are basically scams, in the fact that the fees are outrageous. Update regarding minimum purchases: Apparently, Visa is allowing minimum purchase requirements in the U.S. of $10 or less.  However, it seems that MasterCard still does not allow them, for the most part.  Moral of the story: research the credit card issuers' policies.  A further update regarding minimum purchases: In the US, merchants will be allowed to require a minimum purchase of up to $10 for credit card transactions.  (I am guessing that prompted the Visa rule change mentioned above.) More detail can be found here in this answer, along with a link to the text of the bill itself."