Car rental deposit on credit card. Can it be higher than credit limit?

Chaoscontrol

The only reason I'm interested in a credit card is for rental deposits when travelling, since they get annoying sometimes with debit cards. 

Sometimes these deposits get as high as £2500. 

Most credit cards give you a very low limit to start with. Would this mean it would be rejected when given for a higher deposit? 

Or since it's just a deposit it just gets "blocked" and not charged? I think the previous credit cards I've used for this, the "deposit" has never shown in the statement at all. Not during, not after. 

DesG

Chaoscontrol said:

Most credit cards give you a very low limit to start with. Would this mean it would be rejected when given for a higher deposit? 

Yes, they reserve the deposit amount, so you need to have available funds to cover it on you limit/balance.

born_again

Chaoscontrol said:

The only reason I'm interested in a credit card is for rental deposits when travelling, since they get annoying sometimes with debit cards. 

Sometimes these deposits get as high as £2500. 

Most credit cards give you a very low limit to start with. Would this mean it would be rejected when given for a higher deposit? 

Or since it's just a deposit it just gets "blocked" and not charged? I think the previous credit cards I've used for this, the "deposit" has never shown in the statement at all. Not during, not after. 

Could get declined as over your limit. So you would not get the hire car.
So be prepared in case it does happen. CC are far more careful now about exceeding limits, even for just pre authorisation.

vacheron

The funds reservation would be rejected as the hire company need to know that they are able to take all this money from you if you damage their car. If you don't have that limit, they can't take that money.

A cynical person may say that the hire companies could also be setting this limit unnecessarily high simply so that people without a credit card, or one with a high enough limit, are forced to purchase the hire companies' own hugely overpriced insurance cover.  

Brie

Call your credit card company and explain that this is the reason you need a limit increase.  

Chaoscontrol

Just applied to Virgin Money credit card. Instant approval, £4200 credit limit from start. Problem solved. 

MrFrugalFever

Brie said:

Call your credit card company and explain that this is the reason you need a limit increase.  

You do come out with some spurious comments at times. I do not know of any lender that would simply increase a credit limit on the basis of someone requiring more due to car hire pre-authorisation, even less so immediately after a fresh application with a full underwrite. A credit limit is reviewed on the individuals personal circumstances and affordability assessment, not because they wish to splurge out at Harrods one weekend on a new vintage mink coat.

In any eventuality the OP has now resolved their issue with, what appears to be, a reasonably safe bet credit limit for such activities as car hire.

MrFrugalFever

Chaoscontrol said:

Just applied to Virgin Money credit card. Instant approval, £4200 credit limit from start. Problem solved. 

I assume that your research led you to Virgin Money on the basis that it benefitted you not just for the car hire pre-authorisations but also for the features it provides (such as 0% purchases, 0% Foreign Exchange transaction fees etc)?

Chaoscontrol

MrFrugalFever said:

Chaoscontrol said:

Just applied to Virgin Money credit card. Instant approval, £4200 credit limit from start. Problem solved. 

I assume that your research led you to Virgin Money on the basis that it benefitted you not just for the car hire pre-authorisations but also for the features it provides (such as 0% purchases, 0% Foreign Exchange transaction fees etc)?

Exactly. While I don't plan to use it for anything else than car rental deposits (since I already have Debit cards to spend on and don't need credit at all), I still wanted it not to have any fees abroad just in case I needed it at some point, or the car company charged something. Ideally I was also looking for no ATM fees, but those are more scarce and there were no good options for my situation. 

If anyone is interested in travel cards, all these have 0% exchange fees. Noted on each were the disadvantages for my case:

Halifax Clarity - All good. But Halifax, might block Lloyds switch bonus. 
Barclaycard - All good, but worst document review process. Kill them. 

Creation - Can't find application.

The Natwest credit card - ATM charge, PIN pad

Nationwide - ATM charge, PIN pad

Post Office Platinum/Travel - ATM charge

RBS Reward black - ATM charge

Santander 123/All in One - ATM charge, monthly fee

Ulster bank - ATM charge, PIN?

Virgin Money travel - ATM charge

Zopa - Low credit limit, max £1500

MrFrugalFever

I spend a fair amount of time abroad, both Europe and USA. 

My absolute go-to cards are Zopa (£5k limit currently), 118M (£3k limit) and backup that I almost never use, First Direct debit card and Kroo Debit Card. All of these are near perfect VISA / Mastercard FX exchange cards with 0 fee's.

If you spend a fair bit of time travelling too, it could be worth exploring credit cards that generate you something back such as Air Miles.

I personally almost NEVER spend on a Debit Card and will never use an ATM. The end result of this is I can fly with certain Airlines for almost free in Premium or Business Cabin Class.

Chaoscontrol

MrFrugalFever said:

I spend a fair amount of time abroad, both Europe and USA. 

My absolute go-to cards are Zopa (£5k limit currently), 118M (£3k limit) and backup that I almost never use, First Direct debit card and Kroo Debit Card. All of these are near perfect VISA / Mastercard FX exchange cards with 0 fee's.

If you spend a fair bit of time travelling too, it could be worth exploring credit cards that generate you something back such as Air Miles.

I personally almost NEVER spend on a Debit Card and will never use an ATM. The end result of this is I can fly with certain Airlines for almost free in Premium or Business Cabin Class.

Surprised to see Zopa can get £5k limit. It says on their website it only goes up to £1500, and that's the reason I discarded them. 

Tbh I've never bought into the hype of airline miles, sorry. I don't know what you spend, but in my mind it's impossible to justify.

Plus I wouldn't like having all my spend on a crappy credit card account (which are never as good as actual bank apps) and only get a lump payment out of my account at the end of the month. It makes understanding expenses a nightmare. No way. 

And to pay a single business class ticket on miles you have to spend a f ton of money.