With rising costs of both insurance and healthcare costs, healthcare credit cards, also known as medical credit cards, are growing in popularity. But because they operate a little differently from regular credit cards, it’s important to learn more about the card, where they are accepted, and interest and fees before choosing a healthcare credit card.
Healthcare credit cards, like Care Credit, AccessOne Med Card, or Citi Health Card, are credit cards designed specifically for medical use. Unlike a regular consumer credit card, you couldn’t use this card to fund a shopping trip or dinner out. These cards are used specifically to pay for any service a doctor or dentist provides and are only accepted by medical providers. Many healthcare credit cards can also be used at veterinarian offices.
Some of the most common things people put on their healthcare credit cards include:
If you’re in the market for a healthcare credit card, ask yourself these questions when shopping around:
This type of credit card is typically used for services that insurance or a payment plan won’t cover. More often than not, this includes elective surgeries and procedures like cosmetic surgery or LASIK.
On the other hand, if you plan on using a healthcare credit card for doctor’s visits and necessary medical procedures, this is probably not the card for you. Doctor’s offices and hospitals will put you on an affordable monthly payment plan or adjust your bill if you don’t have insurance or can’t afford your bill. This ends up being significantly cheaper than a high interest credit card.
Many offices don’t accept healthcare cards, so double check before you decide on a card. It’s best to apply for a card once you have the actual procedure and doctor in mind. At that point, you can find out what cards and forms of payment they accept.
Most healthcare credit cards offer no interest for the first twelve months. If you can’t pay off the balance in that amount of time, your interest rate jumps to anywhere between 15% and 28%. Because they’re used to fund expensive procedures, carrying a balance on your card means higher monthly payments. For example, a card with a 28% interest rate and a $5000 balance will end up costing you a monthly payment of around $175. Make sure you take this into account before you open a healthcare credit card.
Healthcare credit cards typically have fees. At the very least, you can expect to pay a late fee of up to $35 if you are ever late on your payment. Some cards, like the Humana Advance, have an annual fee as well.
Go with a card that offers promotions, preferably deferred interest. Care Credit, for example, offers no interest if you pay off your balance within a year. This can result in huge savings. Be sure to read the fine print as well. If you don’t pay off your balance within a year, you’ll end up getting a year’s worth of interest tacked onto your original balance. That means a $5000 procedure at 20% interest will end up costing you an extra $1000.
It’s also a good idea to check with your doctor; some providers offer additional incentives for using a healthcare credit card, such as extended no-interest or free services.
A healthcare credit card can help you fund procedures with zero or low interest, but all cards are different. Doing plenty of research and fully understanding the card’s terms will help you choose the perfect card.