How does the "deposit" on a credit card work for renting a car?

Did you know that when you rent a car, rental companies perform a pre-authorization on your credit card as a retention? This practice may raise questions about why and for what a credit card is needed in the car rental process.

Therefore, in this blog, we will explain to you in a clear and detailed way what a pre-authorization is, how it works, and what to do in case the release of this does not reflect in your account. Also, we will give you information about the lowest deposits in the market offered by MEX Rent-A-Car.

Keep reading to find out more, we will guide you step by step and clear up all your doubts.

What is a pre-authorization?

A pre-authorization, also called a "hold" or "deposit," is a banking operation that some merchants perform on their customers' cards. This operation temporarily freezes or blocks an amount from your credit line with the aim of guaranteeing payment for any additional charge at the end of the rental.

For example, suppose a customer is about to rent a car and presents a credit card with an available limit of $10,000 dollars, and MEX makes a pre-authorization of $1,500. That means that the customer can only use $8,500 dollars from their credit line for other expenses.

When the rental ends, and if there are no extra charges to collect, MEX will release that hold, and then the customer can use the amount that was retained. The extra charges to collect depend on the lease contract, the category of the rented car, and also on the coverage or protection that is acquired at our counter.

What is the difference between a charge and pre-authorization?

A pre-authorization is not a charge or a collection; it is only a block of an amount on your credit card. Charges, on the other hand, are processed as a payable amount or “venta” (in spanish) and are recorded in your account statement. Therefore, pre-authorizations cannot generate interest, while charges can.

How can I identify whether a movement is a pre-authorization or a charge?

The easiest way to identify the type of operation is through the voucher or ticket generated at the counter:

• The pre-authorization voucher has the wording "Check-in."
• The payment or charge voucher has the wording "Venta."

How do holds on a credit card work?

Pre-authorizations are carried out at the bank terminal. The sales agent enters the credit card in the terminal, along with the deposit amount. The customer types their PIN to authorize the operation. Then the check-in voucher is generated with a folio, which is given to the customer as proof of successful operation.

When the customer returns the car at the end of the rental, if there are no outstanding charges, the agent performs the check-out, releases the hold, and hands the release voucher to the customer. From that moment on, MEX has no power over the hold, and the process is entirely in the hands of the bank. On the other hand, if there were any outstanding payment at the end of the rental, the customer would be informed, and the authorization now becomes a charge to cover the payable amount.

What is the pre-authorization used for?

The pre-authorization serves to secure the payment of any additional unexpected cost that arises during the car rental. For example, these costs may include:

• Damage or theft of the car
• Loss of keys and/or plates
• Traffic fines
• Additional rental days or contract extension
• Missing fuel
• Negligence
• Damage or extraordinary dirtiness in the car interiors
• Other expenses.

How is it released?

Generally, any pre-authorization expires automatically after a few days. However, at the end of the rental, the agent performs a closure operation at the terminal to release the hold more quickly. In this way, the check-out voucher is generated (which has the same folio number as the check-in of the pre-authorization) and is handed to the customer.

Now, once the deposit is released, how long does it take for that amount to be reflected as available in your account? The answer is: it depends on the bank. Some banks reflect it immediately, others may take longer (an average of 8 days). However, for mexican cards, this process usually does not last more than 30 days.

What do I do if the release has not reflected in my account?

If at the end of your rental the amount of the pre-authorization still appears as retained in your account, you can do the following:

1. Wait at least 8 natural days for your bank systems to update.
2. Contact your bank to ask them to reflect the release of the hold in your account.
3. Present to your bank the check-in and check-out voucher of MEX Rent-A-Car to prove that the release has been carried out correctly.

Important points to keep in mind:

1. The bank sets the rules. The release timing, how and when it is processed, as well as your credit limit, all are determined by your bank. Once the block is released, MEX cannot intervene in the process.
2. Always use a credit card. MEX Rent-A-Car requires a credit card for the deposit. It's your responsibility to ensure that the card is indeed a credit card, otherwise you may face issues with the bank when releasing the deposit.
3. It may be that in some cases, the pre-authorization process doesn't show up in your bank's mobile app or your bank statement. But that doesn't mean the operation wasn't valid or successful.
4. Query should be made as soon as possible. If you have any special inquiries or complaints about the pre-authorization of your rental, please contact us before three months have passed since the end of your contract.
5. MEX Rent-A-Car has the lowest deposits in the market. We know your credit line is valuable, which is why we offer one of the lowest deposits at MEX. In many cases, it is only $1,500 mexican pesos.

In summary, a pre-authorization is a banking operation performed on your credit card when you rent a car. It's made to guarantee the payment of any additional cost that may arise during the rental. Additionally, at MEX Rent-A-Car we offer one of the lowest deposits in the market.

If you are looking for a reliable car rental company with the best prices, we are the perfect choice for you. Book your car now!