A medical credit card’s no-interest deal is often deferred interest. Leave any balance when the promotion ends, and you owe interest on the whole bill, back to the day you charged it. Before you sign up at the front desk, ask whether the provider offers its own interest-free payment plan.
Miss a 12-month promotion by $100 on a $3,000 dental bill, and the interest can top $500.
By our math, that’s what CareCredit‘s 32.99% annual percentage rate (APR) adds if you pay the bill down evenly and come up short. The interest runs on the balance from the day of the charge and lands in one lump sum when the promotion ends. A true 0% intro APR card would charge interest only on the $100.
Missing the deadline is common. The Consumer Financial Protection Bureau (CFPB) found that people were charged interest on 20% of the healthcare purchases they made with deferred-interest cards and loans from 2015 to 2020. It also reports that patients who sign up at a provider’s office can mistake the card for the office’s own payment plan.
A real payment plan from the office is what to ask for first. Most medical providers once ran their own no-cost or low-cost plans, and though financing companies have been replacing them, your dentist, vet, or doctor may still offer one.
Ask before anything goes on a card, and confirm the plan charges no interest at all, since some plans offered at the front desk carry deferred interest too.
At a hospital, ask about the financial assistance policy as well. The CFPB warns that signing up for a medical card first can make that help harder to get. Negotiating the bill can also shrink what you finance.
If the card is still your best option, pay well above the minimum. CareCredit sets it at 3.25% of a balance this size, which would leave about $2,000 of the $3,000 unpaid after 12 months, by our math. Clearing the bill in 12 months takes $250 a month, and autopaying $275 finishes a month early, so one late payment won’t push you past the deadline.
Treat the card as the last option you ask about, not the first one you’re offered.
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