What is the credit card thing for when renting a car?

I'm 22 and in two weeks i will have held my license for one year. My parents have my car abroad so i want to rent a car for like a week so i can do some errands. I have found car hire 3000, which allows driver's minimum 21 years to rent which is perfect, however someone waas telling me that even after you pay, the car rental agency ask to swipe ur card to check u have enough if there is accidental damage etc. but like up to 350 quid??? is this correct cos i was just going to pay for the extra excess insurance anyway but i don't have 350 on my credit card for that! i'm a poor student! please help i dont understand...