'Student' credit card and car rental

Billy_G

Wondering if anyone could help me.

I'm going on holiday to Iceland in a couple of months, but only just realised that I need a credit card to be able to rent a car. This is a problem because, as a student, I don't own a credit card.

I've contacted my bank and been informed that I am eligible for a 'Student' credit card. Could anybody tell me how this differs to an ordinary credit card, and whether I'd be able to use it to rent a car abroad?

Thanks

Fruit_and_Nut_Case

I suspect it's a marketing term used by the bank. I doubt if a car rental place could tell by looking. It may, however, have a relatively low credit limit.

InsideInsurance

Only by reading the terms can you tell.

Generally the only difference is in the underwriting terms in that they will give you one despite low/ no income. Some come with a more "funky" design, though this is what the c40 year old guy in marketing thinks is funky for a 19 year old student than what necessarily is etc.

JordyC

As above, they are like "standard" credit cards but with restricted maximum limits - usually of £500. I would say they're mostly used to help build up experience using and paying back credit - similar to a Barclaycard initial.

It's curious that you need a credit card to rent a car, though? Does it specify type? I know from experience in Germany that using a mastercard can sometimes be tricky; not sure of the situation in Iceland, though.

Billy_G

Thanks for the quick responses everyone.

I suspected that it may have a low credit limit, but that's not really a concern. I don't intend to use the card for anything other than the car rental.

So do you think that I'll be able to use a Student credit card to rent a car with?

@JordyC It is very frustrating, I've only been able to find one company who allow you to pay with cash/debit card and they don't seem like the most reputable. They all state that they take a print of your credit card then use charge it to charge you should you damage the vehicle. Is this normal? I haven't rented a car before.

InsideInsurance

Despite that they say they want a credit card most will accept chargecards and debit cards too.

Just remember that when they give you the car they will pre-authorise an amount on the card, can be anything from £250 to £5,000 but normally corresponds to the excess. They wont actually take the money unless you bring it back damaged/ low on fuel etc but it does deduct it from your available balance until the authorisation drops off which can be a week.

So if you use a debit card you just have to ensure your current account has enough funds to continue to operate normally with that money missing for a week or so

pheonix254

It is standard practice for car rentals to require a credit card as a deposit for the vehicle, in case you steal or damage it. They will block a certain amount on the card whilst the vehicle is rented - it doesn't come out as a transaction unless you do damage the car and don't pay another way, but the usable limit on the card will be lower for the duration of the rental.

Student Credit cards are absolutely no different to any other credit card. It is likely that the lack of credit history and zero income will be less of an issue for a student credit card application - you're far less likely to be declined for a student cc than a mainstream cc if you have no history.

The limit on the card varies from bank to bank, but is usually around £500. The CC limit needs to be enough to cover the hire car deposit - check this - £500 might not be enough. Other than that, it should be suitable, provided the car hire place accepts the issuer (mastercard, visa, amex etc)

Billy_G

Thanks again everyone, your posts have all been really helpful.

As an update on my situation, I contacted a rental company who've said that if I pay a deposit of 150.000 ISK (£75) and purchase some of their additional insurances I can pay with a debit card.

Hopefully this is my problem solved and means that I can put off applying for a credit card and entering the real world for another year or two yet.

Billy_G

Unfortunately I got my maths wrong. It's a £750 deposit. May have to get that credit card yet...

Nasqueron

Having a card and using it (paying off in full each month) for even simple things like weekly shop would actually set you up nicely for the real world as it will establish you as a reliable payer and help you get a better card/better rate in the future as and when you get a job - remember you don't pay any fees or interest if it's paid each month

pheonix254

Thats a year or two that you're not building a credit history. It's up to you but getting a cc as a student was a move I don't regret - just don't buy things you otherwise couldn't afford with it, and you'll stay out of trouble.

In my humble opinion you'll be in a far better position in your mid twenties (when you're looking for car loans, mortgages or having to pass tenancy checks) if you have evidence that you can manage credit and debt properly having owned a credit card for several years. But it's completely your choice - I'm sure several of those in the DFW section would tell you to run a mile from them.