If you’ve ever had to pay a medical bill, then you know how expensive even routine health care can be. Even with health insurance, you still have copays, deductibles, and coinsurance to pay before insurance pays its share. Plus, some insurance policies don’t cover every health expense.
If you need help paying off your medical bills, a medical credit card could be the answer. Medical credit cards help patients like you cover out-of-pocket health care costs without busting your budget.
What Is a Medical Credit Card?
A medical credit card is designed specifically for paying for health care costs and helping you pay off your medical bills over time. You can use it to pay for health care expenses like medical treatment, medical equipment, cosmetic surgery, dental, vision, hearing, and even veterinary costs.
Medical credit cards work just like traditional credit cards, but they’re more specialized. Usually, you can only use the credit line to pay for medical bills beyond your out-of-pocket means. You can’t pay for groceries or car repairs with your medical credit card.
Many medical credit cards have interest rates similar to standard credit cards. Others, like the Wells Fargo Health Advantage Card, have lower interest rates than most traditional cards, while some (like the well-known medical credit card brand CareCredit) have higher interest rates. P And some, like the AccessOne MedCard, live within broader patient financial assistance programs that offer a variety of flexible payment plans for health care expenses.
How Medical Credit Cards Work
Similar to regular credit cards, medical credit card issuers check your credit report to determine if you qualify based on your credit score. The higher your FICO score, the more likely you are to be approved .
If your health care provider accepts the medical credit card as payment, the provider charges the card, and you make monthly payments on the medical card. Some medical and veterinary practices market medical credit cards directly to patients and pet owners, so you might be able to apply at your visit.
Some cards offer a deferred interest promotional period, such as 12 months, to pay off the balance without paying interest. If you don’t pay off the balance in full, the issuer hits you with the full interest accrued in addition to the remaining balance. Usually, the more you spend, the longer the deferred interest period.
Pros & Cons of Medical Credit Cards
Medical credit cards sound like a good deal for anyone who regularly deals with medical, dental, or veterinary practices. But, as with any credit card, you’ll want to know what you’re getting into and understand the fine print before you apply.
|Deferred Interest||You May Need to Pay Deferred Interest|
|Fast Approval||Requires Credit Check|
|Limited Usage Prevents Overspending||Often Charges High Interest Rates and Late Fees|
|No Annual Fee||No Rewards Program|
Pros of Medical Credit Cards
A medical bill from an accident can be an unexpected burden, but a medical credit card might offer a way to mitigate the situation.
- Deferred Interest. Many medical credit cards offer a 0% APR promotional period for at least six months, and some stretch as long as 24 months. Postponing interest payments allows you to save money on interest charges if you can pay off the balance during the promotional period.
- Fast Approval and Payment. If you don’t have the funds to pay the bill in full at the time of service, you can apply in the doctor’s or vet’s office during check out. If approved, you pay the credit card bill down the road instead of the provider right then.
- Limited Usage Prevents Overspending. For people with good credit but don’t like using credit cards, a medical credit card limits where you can make purchases. Vendor limitations mean you put random purchases on the medical card, which cuts down on impulse buying.
- No Annual Fee. Medical credit cards generally don’t have annual fees, so you don’t need to close the account after paying it off. If you are trying to improve your credit, keeping the account open can help boost your FICO score.
Cons of Medical Credit Cards
Medical credit cards can cost you a lot of money if you’re not careful. They have some other drawbacks too.
- Potential to Pay Deferred Interest. Although a medical credit card might let you pay off the loan within the promotional period without paying interest, be careful. If you don’t pay it off entirely during that time, it could charge you back interest for the full purchase amount.
- Requires a Credit Check. The lender must check your credit to apply for a medical credit card. If you’ve had credit troubles or unpaid medical bills in the past, you might not qualify for a medical credit card. You’ll need to find alternative ways to manage the bill.
- High Interest Rates and Late Fees. Deferred interest continues to accrue during the 0% APR offer period. At the end of the promotional period, you must pay the compounded past interest plus new interest. In addition, interest rates can be exorbitant — sometimes 10% to 15% higher than the average credit card interest rate, which hovers in the mid-teens. Late fees can also pile onto your existing balance.
- No Rewards Program. Many credit cards offer perks like cash back and travel points for purchases. However, medical credit cards do not provide these rewards programs.
Should You Apply for a Medical Credit Card?
When you’re standing at the checkout desk after medical treatment and the clerk is asking for money you don’t have, the convenience of a medical credit card is tempting. But it may not be your only option — or the best one.
How Medical Debt Affects Your Credit
Many people get sick and end up with bills they can’t pay because they aren’t able to work or the bills are too high. It’s easy to see how medical debt became one of the most common kinds of debt in the U.S. Your medical provider — and eventually the collection agency — may report your unpaid bills to a credit bureau, lowering your credit score.
When your credit history reflects unpaid medical bills, it can be more difficult to secure other types of debt, such as a personal loan, student loan, or credit card. A lower credit score can even make it harder to qualify for rental housing.
Alternatives to a Medical Credit Card
Here are two essential steps to take before accepting and paying a medical bill:
- Review Your EOBs. Scrutinize your claim’s explanation of benefits statements and call the insurance company weekly to discuss billing errors and coverage. The insurer may identify improper medical codes on the bill and advise you to contact the provider to correct them or resubmit the claim.
- Negotiate With Your Provider. Negotiating with your provider can be surprisingly effective. Many are willing to take a haircut if it means getting paid at all.
Once you’ve identified any billing or insurance errors and have a final bill, there are several ways to pay medical costs without turning to a medical credit card.
- Ask For Cash Discount. Some providers will accept a discounted amount if you are paying in cash. It never hurts to ask.
- Ask for a Payment Plan. The easiest way to deal with a bill is to ask the provider for low-interest financing options other than a credit card. Instead of paying the full amount, a payment plan breaks it into smaller repayments over time.
- Use Your Employer’s Medical Accounts. If you have an HSA, FSA, or HRA with your employer, use those funds interest-free to help reduce your medical costs.
- Ask Family for Financial Help. You might have family members willing and able to help you with medical bills.
- Start a Crowdfunding Campaign. Ask friends, family, and strangers to help with your medical bill through sites like GoFundMe, JustGiving, or CoFund Health.
- Save for Future Medical Expenses. If your employer doesn’t offer special health savings vehicles, set up a high-yield savings account for medical emergencies.
- Take Out a Personal Loan. Borrowers with fair or better credit might find more favorable terms with a personal loan to pay their medical bills.
- Take Out a HELOC. If you have plenty of equity in your home, a home equity line of credit (HELOC) might offer a way to pay some or all of your medical bills.
- Apply for a 0% Interest Credit Card. If you have good or excellent credit, you may qualify for a nonmedical credit card with 0% interest for as long as 21 months. Then, you can pay your medical bills with that card and postpone interest until the end of the introduction period.
- Do a Balance Transfer. If you paid a medical bill on a credit card, you might already have a card with a low or 0% APR balance transfer interest rate. Or, apply for a new credit account that offers a balance transfer promotion.
- File for Bankruptcy. If you believe bankruptcy is the only option you have left, contact an attorney to discuss this catastrophic situation.
Medical Credit Card FAQs
Medical credit cards can be complicated, so you probably have questions about their financial implications. These are some of the most common medical credit card questions, answered.
What Does a Medical Credit Card Cover?
A medical credit card covers health care expenses, such as:
- Doctor’s office visit
- Prescription drugs and other medications
- Medical procedures with specialists
- Optometrist visit
- Dentist visit
- Audiologist visit
- Medical equipment and supplies
- Residential treatment programs
- Cosmetic surgery
- Veterinarian bills
That said, not all medical and veterinary providers accept medical credit cards. If you already have one, ask the provider before your visit to confirm that they’ll accept it.
How Are Medical Credit Cards Different From Traditional Credit Cards?
Both types of cards use credit bureau checks to determine if you qualify for the credit card. However, medical credit cards can only be used for eligible medical expenses, while traditional credit cards are useful for any charge type.
What Are the Best Credit Cards for Medical Debt?
Don’t want a medical credit card quite yet? Here are the five best credit cards to help you pay for medical debt without a medical credit card:
- Citi Double Cash Card. Perks include no annual fee, $200 sign up bonus after spending $1,500, unlimited 2% cash back on all purchases, and 0% intro APR for 18 months on balance transfers.
- Chase Freedom Unlimited. No annual fee, 1.5% cash back on all purchases, 3% cash back on drugstore purchases, and 0% APR for the first 15 months on purchases and balance transfers (then an ongoing APR of 20.49% - 29.24%).
- AARP® Essential Rewards Mastercard®. No annual fee, 0% introductory APR for 15 months on balance transfers made within 45 days of account opening, 3% cash back on gas and drug stores, and 2% on medical expenses.
- Wells Fargo Reflect®. No annual fee, 0% intro APR for up to 21 months on purchases and qualifying balance transfers.
- U.S. Bank Visa Platinum. No annual fee, 0% introductory period on purchases and balance transfers for 20 billing cycles, and U.S. Bank ExtendPay™ Plan lets you pay a small monthly fee to break down large purchases into fixed monthly payments.
Can I Get a Medical Credit Card With Bad Credit?
Medical credit cards may not be available to everyone. They prefer cardholders with good or excellent credit who received a bill they can’t pay off immediately.
Medical credit cards are not intended for borrowers with bad credit since they can have high interest and fees if not paid off during the promotional period. Consider checking your credit report before applying for a medical credit card.
Medical credit cards can be a tool to help you pay for medical debt, but they probably shouldn’t be your first choice. While the convenience of applying for a medical credit card at a doctor’s office is tempting, you have many other options that save you money, like negotiating with your medical provider for a cash discount when possible.
Remember, even if you take out a medical credit card and make the minimum payment during the promotional period, there is a drawback. If you don’t pay off the total amount before the end of the 0% interest period, they may add the past interest amount based on the financed amount. So, even if you paid off 90% of the debt, you’d still have to pay all the interest.
Fortunately, patients with good or excellent credit have additional financing options. Consider a traditional credit card with cash back, travel rewards, or a personal loan instead of a medical credit card.
Finally, get to know your health insurance plan’s inner workings. Your best defense against medical debt is clearly understanding your healthcare copays, deductibles, and coinsurance.