How many of those ~25-30% of consumers are the underclass?

@RonJohn Not sure, but I bet the majority because there's also ~10% of people in the US that have no bank accounts at all and they are almost exclusively very low-income individuals.

And gas pumps can put really large holds on debit cards sometimes.

One word of caution, though: some rental car companies flat out refuse to rent you a car if you do not have a credit card.

@Ilia Smilga: Though it's perfectly possible to spend years living in the US (or Europe - done both) without ever needing to rent a car.

Of course :-) I've spent 3 years in the US, and most of the time I have managed just fine with a bike and public transportation. The one time I tried to rent a car and failed, though, was a really unpleasant surprise...

@HartCO You can have a bank account if you are low income. What gets you in trouble is if you stiffed a bank. That makes banks not want to deal with you until the money is repaid.

Might be worth pointing out why car rental companies require a credit card: It's to cover the damage insurance waiver. If you rent a car with default insurance you will typically have a collision damage waiver of around $1000. So if you damage the car, you pay the first $1000 of the repair cost (the rest is paid by insurance). In the event of a claim, if they already have your CC details, they can immediately and irrevocably deduct this charge. Otherwise, there's no easy way for them to sting you for this cash.

@OscarBravo A credit card charge isn't irrevocable. If they try to charge you for something you don't actually owe, you can dispute the charge. This is actually much easier with a credit card than with a debit card (where the money is gone immediately from your bank account.)

@OscarBravo That's dangerously wrong advice. The default insurance on a rental car in the US is nothing. You are fully liable for the car if it is damaged or stolen.

@Ilia Smilga: And if you're going to be here for any length of time, it's probably a lot cheaper to go on Craigslist and just buy an older used car.

The need for a credit card to rent a car is not about being able to charge you a deductible or full damages if the car is lost or stolen. They could do this with a debit card too. Rather, it's about seeing that you're able to get a credit card and still have it active, i.e. it's a simplistic credit check, with the assumption that if you're not, renting a car to you would be high-risk.

@jamesqf: it would have made sense if I had needed the car on any kind of regular basis - like, at least once a week. Otherwise (I think) the insurance would have made it too expensive.

@user71659 Your correct - the renter is always entirely liable for the car. You have, however, the option of insuring against this risk. Usually, there's the default package (with waiver) or the more expensive full cover package with no waiver. Perhaps I could be more precise: If you rent a car and choose the default insurance package...

@OscarBravo That's still a wrong statement: LDW/CDW is usually zero deductible (read your contracts though). The only rental insurance with deductible that I recall is for moving trucks.

@reirab I could've been clearer: The rental contract makes you liable; that's what's irrevocable. The credit card provides a simple method for the rental company to take the money. You can try to dispute the charge, but they have a signed contract saying you agreed to it. If there was no credit card, they'd need to pursue you for the money and that would be a real pain for them.

@user71659 OK ok I give in... I'm not really concerned about the minutiae of the insurance law - the point is about the credit card: It provides an easy way for them to charge you.

@OscarBravo Because it's not to charge you, it's exactly what R.. says, it's a indirect credit check. I just noticed what the U-Haul page says, in order to buy better insurance, you must pay by credit, which is the opposite of what you're saying. The insurance carrier sees people who have the ability to get a credit card as a better risk.

@R.. How can you charge a debit card beyond its limit? With a CC, they can take the whole waiver in one go. You have signed a contract letting them, so no chance getting it back and they've got the money. The point about a car rental company caring about your credit score is silly - they only care if you have a chargeable credit card. But don't listen to me - rentalcars.com/en/guides/rental-basics/why-credit-card

@OscarBravo: A credit card usually can't be charged for more than the credit limit; it will just be declined. I have credit cards with much lower limits than my debit card balance.

@R.. ...which is why they take a pre-authorisation charge. It doesn't come off your card, but it is guaranteed (so not declined). If that happens you don't get to rent the car. Just read the link - don't take my word for it.

@OscarBravo: You cannot take a pre-authorization for greater than the credit limit. If the purpose of the credit card were just to preauthorize for some fairly large amount, a debit card with a balance that large would suffice in place of a credit card. It doesn't. Moreover you don't need a credit card with a ridiculously high limit to rent a car. Any credit card will do as long as it can be pre-authorized for the rental fees and some extra to cover possible charges like refueling.

@OscarBravo The exact same reason why US consumer insurers look at your credit score and adjust your rates based on it. If you can't be trusted with borrowing money, you probably are going to mistreat things that are loaned to you and/or engage in fraud. In fact when you rent by debit, rental companies usually run a credit check. The fact that this requirement doesn't apply to credit is another piece of evidence for R..