If debit card transaction is refused, the rental company is left holding the bag. CC transaction has much greater chance to come through, and if the cardholder has no money, it's CC company's problem now.

This can be solved for debit cards by charging at the start of the rental, but what if the renter damages the car (or doesn't fuel up, or does anything else that needs additional charge), and again the charge is refused? The debit again is much more dangerous for the rental company here - CC can be charged (provided the limit hasn't been used up) much easier. True, people can default on CC payments - but it's not the rental company problem, it's the bank's problem. That's why they charge the outrageous interest on cards (20%+).

The CC can't be charged for any big amount though. I don't think the value of a 1000USD credit compared to the value of a car is of any assurance in practice. Also the CC can be almost maxed out anyway.

I guess the rental companies that fuss about CCs has some kind of kickback.

What's "big amount"? I've charged multiple thousands of dollars on my cards, many times. Of course, you need a high-limit card, but if you have a good credit score, no problem getting at least one card with 20K-30K limit - you could literally pay for a whole car with such a card, if the car dealership agreed to eat the processing fee (they probably won't). And AFAIR there are ways to check how much is left to the limit.

I’ve made an $8000 purchase on a credit card. You can do much more with a quick call.

I’ve even made a $25,000 purchase that I was reimbursed for.

Putting a charge through to visa if you damage the car is more reliable than trying to charge a debit card. In the US people without credit cards often have poor credit, often from not paying back debts (or so goes the stigma), and I'm not sure if you can just charge more to a debit card later (it's been a while since I've used one).

Plus, then if you can't pay, it's visa's problem, not theirs.

Usually not Visa's but issuing bank's. Visa would just be moving money around, but the actual credit would be extended by the issuing bank.

They can charge more on the credit card later if necessary (like if the car is kept too long or is damaged), whereas they cannot charge more on the debit card as it was authorized only that one time using the PIN.

They could think about a deposit and reserve that amount on the debit card, then remove that reservation if everything is fine. Depends on legislative environment of course: this likely won't fly if they would be stuck with fines and unpaid parking tickets after a renter left.

Nobody would pay a deposit of the size that's enough to cover a damaged car. Car damage is very expensive (a simple fender-bender can run four figures), and people would be reluctant to lock up thousands of dollars to facilitate a 100 dollar rental.

Actually it's very much the norm to block a retainer on the card when you rent a car in most of Europe.

The amount can vary depending on the rental company, the type of car and - obviously - the location and is usually an amount between 1'000 and 3'000 Euro.

It's usually the amount of the deductible if you break the car.

Some hotels will do that too.

The amount is released after you return the car, but during the time of rental it's deducted from your card limit.

E: clarification

3000 Euro just to rent a car? That doesn't sound very practical. In fact, I've rented in Europe and I don't remember ever paying any deposits like that. That'd definitely block any other operation on the card, I didn't have very high limits back then - I'd remember something like that.

That's not the rental car company's problem, it's the bank's problem.

Credit cards allow them to get a lot more money after the fact than a debit card AFAIK in case you damage the car.