Car Hire Deposit Taken in Full and Then Returned Minus Fees

Nsar2

Is it normal for car hire companies to charge a full damage deposit to your credit card rather than charge a nominal £0.01 pending the return of the vehicle?
 I've just been hit with c.£40 of currency exchange/transaction charges because the hire company charged 900 Euros to my card and then returned 900 Euros a few days after the hire period.
I've hired loads of cars over the years but can't recall this happening before and when I queried it the car hire company sent a standard email basically saying tough, raise a complaint with your credit card company.

samtaylor99

I use a few car hire companies in the Canaries, one does charge the full amount to your card and returns it at the end of the hire, another doesn't.  I only use the Full Charge one when they are much cheaper.  You were unfortunate with the timing but it is common practice I'm afraid. On occasion, I have benefitted from this arangement when the Exchange rate has moved in the opposite direction. NB I use a card with no fx bank charges so it's only the exchange rate which impacts the amount returned.

bagand96

Most companies will put a hold of the deposit on your card when the rental starts which later drops off. It's less common, but some will charge the full deposit and then refund it later. What did the T&Cs of your hire agreement say when you booked?

The fees you've incurred are charged by your bank so in that respect the hire company are correct to say it's not their business.  They haven't profited in any way from this arrangement - they will have received €900 in their account and then had €900 leave their account.

heatherw_01

It is more common for them to put a hold rather than a charge as mentioned above, but it does happen in many places and sadly the bank fees are not the car rental company's issue.
As mentioned, getting a FX free card is your best bet for future.

Some information on travel cards in this article which you might find useful: https://www.moneysavingexpert.com/credit-cards/travel-credit-cards/

SpectralNova

I had a similar situation in Hungary. They charged the full amount to my card and refunded it later, but my bank took fees for the currency exchange both times. Since then, I have been using Revolut or Chase for car hire abroad. Both have no foreign transaction fees, and I have not had this issue again.

heatherw_01

SpectralNova said:

I had a similar situation in Hungary. They charged the full amount to my card and refunded it later, but my bank took fees for the currency exchange both times. Since then, I have been using Revolut or Chase for car hire abroad. Both have no foreign transaction fees, and I have not had this issue again.

Yep those are good fee free options.

One thing is though, if you use debit card instead of credit card, you get a bit less protection as you don't have section 75 with a debit card, although you can do chargebacks with a debit card, so you still have some protection.
And of course not everyone can get a fx fee free credit card.

Bit of info on Section 75: https://www.moneysavingexpert.com/reclaim/section75-protect-your-purchases/

Nsar2

Thanks for replies. I called Barclaycard and they refunded the difference as goodwill. I'm sure the charging clause was in there in the10,000 word contract in fine print that you are invited to read on a small ipad screen with 5 families queuing behind you all anxious to start their holiday. I doubt if I'd queried it at the desk , anything would have changed.
I'll try to ascertain how they charge before booking next time, but having just had a quick look on one of the big car hire comparison site it simply says "you may be charged transaction fees". Quite an important thing when the charges add 40% to the hire!

bagand96

Nsar2 said:

Thanks for replies. I called Barclaycard and they refunded the difference as goodwill. I'm sure the charging clause was in there in the10,000 word contract in fine print that you are invited to read on a small ipad screen with 5 families queuing behind you all anxious to start their holiday. I doubt if I'd queried it at the desk , anything would have changed.
I'll try to ascertain how they charge before booking next time, but having just had a quick look on one of the big car hire comparison site it simply says "you may be charged transaction fees". Quite an important thing when the charges add 40% to the hire!

The simple answer here is to get a credit card that offers fee-free foreign transactions.  That way you'll avoid any fees.  You may lose or win a little on currency exchange rate changes if the hire firm does charge and refund, but no bank fees.

bagand96

SpectralNova said:

I had a similar situation in Hungary. They charged the full amount to my card and refunded it later, but my bank took fees for the currency exchange both times. Since then, I have been using Revolut or Chase for car hire abroad. Both have no foreign transaction fees, and I have not had this issue again.

Are Chase and Revolut debit cards?  Worth remembering that using a debit card you need the funds available in the account, and also that some car hire firms will not accept debit cards - again worth checking when you book.