Toronto man denied rental car after trying to use prepaid credit card. Here is why not all businesses accept them.

A man from the Greater Toronto Area said he was refused a car rental because he wanted to pay with a prepaid credit card.

Brian Barnard of Etobicoke recently had to rent a car when his vehicle broke down, and he used a prepaid credit card to rent a car through the Uber app.

He was charged $493, but when Barnard arrived at the rental company to pick up the car, he said they required a security deposit -- a payment they would not accept through prepaid credit card.

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"I don't understand why they couldn't take the card in the first place," said Barnard. "It was frustrating to go there and then be told you won't take my form of payment."

On top of not getting the rental car, Barnard said they refused to refund the $493 he paid to rent it.

"I'm stuck just giving up the fact that I paid for a rental that I didn't get, and I'm just to accept the fact that my money is gone," said Barnard.

A spokesperson for Uber Canada told CTV News Toronto that while it accepts prepaid cards, several rental car companies require a security deposit at the pick-up counter before it releases the car to a customer "and do not accept prepaid cards."

"Uber Rent aims to make renting cars easier, and we regret that this was not the case," the spokesperson said.

A spokesperson for Zoom Rent A Car confirmed to CTV News Toronto it does not accept prepaid credit cards for security deposits, citing industry standards.

"Instead, we require a major credit card under the driver's name for this purpose. It is our policy that we cannot release a vehicle to a client who does not possess a major credit card in their name."

"There can be risks to using prepaid credit cards," said Patrick Sojka, founder of RewardsCanada.ca, a website that reviews credit cards ad loyalty programs.

While you can use prepaid and secured credit cards for many transactions, some companies refuse to accept it as payment for flight and hotel bookings, or car rentals.

With prepaid credit cards, Sojka said you can only spend what has been loaded onto the card, you're not able to carry a balance, and you can avoid falling into debt, but using one won't rebuild your credit history.

Secured credit cards act like traditional credit cards, allowing users to borrow money, pay it off later and rebuild their credit history.

"There are places that will use prepaid cards, but for some purchases, you don't want to use prepaid cards because they are not as secure as regular credit cards," said Sojka.

After trying for more than a month to get a refund, CTV News reached out to Uber on Barnard's behalf, and Uber apologized for the inconvenience and gave him a full refund.

"I'm so relieved I got our money back, and I want to thank CTV News for investigating my case," said Barnard.

Prepaid and secured credit cards may have some benefits, but a traditional credit card can offer protection against fraud, warranty coverage, rewards, or cash back. Having one can also help you avoid problems if you need a hotel room or car rental.