GS Logo
The Green Sheet, Inc

Please Log in

A Thing Debit

Debit Card Free?

In a related story, we may have just witnessed the first chink in the Visa/MasterCard armor, as the argument over merchants being forced to accept debit cards continues to grow.

Hertz and Avis car rental companies have stopped accepting Visa Check Cards or Master Money Cards, known to us as "Debit Cards," to rent a car from their respective locations.

Stacey A. Pinkerd, the product manager for Visa's check card, said the credit card association "reluctantly" went along with the new car rental rules.

These new rules represent the first time that different rules will be used for debit cards vs. credit cards in the marketplace, and could well make way for more compromise on forced debit card acceptance by the retail community.

"There were 1.17 million bankruptcy petitions filed by consumers and businesses in 1996, a growth of 27 percent over 1995, which was already a US record."

Source: American Bankruptcy Institute, Alexandria, VA.

The two car rental companies have historically used the anticipated "credit worthiness" of the consumers who carried a Visa or MasterCard as a basis for letting their cars off the lot.

Bank credit cards are used by 55.8% of households, and are the most widely used credit product. However, 40% of Adults over 18 Do Not Have a Credit Card.

Feeling that virtually anyone can now get a debit card, Hertz and Avis will now treat debit card holders as cash customers, requiring an application and processing weeks in advance, and a deposit.

While Hertz and Avis have certainly made a good argument for their non-acceptance of debit, arguing the risk of a car leaving the lot in the hands of a less than credit worthy customer is bad business, it seems to us that they have just succeeded in getting to the same place that Wal-Mart, The Limited, and hundreds of National Retail Federation members want to be, "Debit Card Free."



[Go Back]