How to Choose a Credit Card for Rental Car Coverage

by Carter Toni

There are plenty of reasons why you might find yourself renting a car. Maybe you’re traveling for work, and you need to get from one office to another. Maybe you’re on vacation and need to get from the airport to your hotel or have decided to rent a car for a road trip. Whatever the reason, many of us will find ourselves at the rental car counter, looking at our credit cards and trying to figure out if it’s better to choose the American Express, the MasterCard, or the Visa.

So, what’s a cardholder to do? How should you choose between a travel-specific credit card or the one that offers the best cashback options? Never fear! Below are some questions that will guide your decision-making and help you out before you even pull your credit cards out of your wallet. Ask yourself these, and you’ll be enjoying discounts and cash back both.

Does your credit card allow you to waive the annual fee?

waive the annual fee

Many credit cards offer a welcome bonus, such as the ability to waive the annual fee for the first year. Sometimes, though, this welcome bonus depends on how much you spend on that particular credit card within a designated timeframe. That’s why this is a crucial question to ask yourself as the cardholder. If you’re working on achieving this perk, don’t let it slip through your hands because you chose a different credit card to charge your rental car on. Put the auto rental on this card, get points, and lose the annual fee all in one fell swoop.

Would a certain credit card be better used at a gas station or grocery store?

If you’ve done your research and gotten yourself the best cash back credit card in Canada and the U.S., you already know that some eligible purchases will get you more cash back than others. A specific credit card may give you more points or cash back if you use it to buy groceries at a grocery store or U.S. gas stations. If you’re in a location where the gas prices are a little higher, that may seem like a negative thing. In actuality, though, with the right credit card, you’ll get more cash back on those groceries. After all, 3% of 40 is higher than 3% of 20.

Is the rental car company offering you car insurance as well?

car insurance as well

Before you sign that rental agreement, make sure you read the fine print. Many companies roll car insurance right into the agreement. It’s worth knowing that you can apply your existing auto insurance to the car you’re renting. If you’ve already used a comparison tool to find cheap car insurance with Geico or any other insurance company, you don’t need their auto insurance. Of course, you absolutely need to have auto insurance, even if you’re driving a rental. Don’t skimp on that. It’s just smart not to make an extra car insurance rate one of your travel purchases. If you’ve proven yourself as a good driver to Geico, State Farm, or another insurance company by having a great driving record, use that cheap auto insurance to your benefit wherever you are.

What is the credit limit on your credit card?

This is the most basic question you have to ask before putting any travel purchases (or groceries at your local U.S. supermarket) on any credit card. If you’re close to reaching your credit limit on your Chase Freedom card or your other American Express, the best way to avoid misusing the financial product in your hands is to put it back in your wallet. Make sure all your cards are rewards cards, and you won’t miss out on too much if you have to opt for a different credit card because your first choice is nearly at the credit limit.

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