Here's What Happens When You Put a Car Rental on the Wrong Card
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Renting a car can feel scary, but the credit card you use at that counter determines how much cash gets locked up, what happens if the car gets damaged, and whether you're paying for coverage you don't need.
Using the right credit card can put you at ease, but not every card is created equal.
You're more likely to overpay for rental insurance
When the rental car agent starts explaining insurance options, it's easy to keep saying yes so you don't worry if you'll be covered.
But if you're using a card with strong rental coverage, that insurance is often already included. All you have to do is use the card to pay for your rental, and it automatically insures you.
If you're using the wrong card, though, the upsell becomes expensive protection instead of unnecessary protection. Daily insurance charges add up fast, especially on longer trips.
The best travel cards all come with rental car insurance so you can be sure you're covered. Compare the best travel cards available here.
Your credit utilization can spike at the wrong time
Even on a credit card, large rental holds reduce your available credit.
If your limit is modest or you're carrying balances elsewhere, that temporary hold can push your utilization higher for the month. That matters most if you're applying for a mortgage, auto loan, or new card soon.
It's not a permanent issue, but timing matters more than people realize.
Damage disputes become messier
If the rental company claims damage after return, the card you used affects how smoothly that dispute goes.
Cards with rental coverage often provide a clear process and documentation support. Without it, you're left dealing directly with the rental company and your insurer, with fewer built-in protections.
That's how small scratches turn into weeks of back-and-forth.
The quiet fix that avoids all of this
The simplest move is also the most overlooked: Always put car rentals on a credit card that includes rental coverage, and decline the rental company's collision waiver when appropriate.
If you travel even a couple of times a year, this one habit can save hundreds in frozen cash, insurance fees, and surprise headaches. Check out the best travel cards to use on your next trip to make sure you're always covered.
Our Research Expert
Jake FitzGerald is a full-time Editorial Strategist and Personal Finance Writer at Motley Fool Money, leading content production and distribution while also writing about credit cards, bank accounts, and other financial products. He has more than a decade of experience editing and shaping financial content to give readers clear, trustworthy money advice. His work focuses on delivering practical insights that empower people to make smarter financial decisions. Off the clock, he’s a fan of college football tailgates and still loyal to his favorite putter -- despite what his short game suggests.