Surgery costs and many such medical expenses usually turn out to be a lump sum and it can also a lot of stress at such times, through the years credit card has been evolving as the most popular form of payment. Credit cards work on a deferred payment basis, allowing you to utilise your credit limit for any purpose and pay it back at a later time.
More and more people rely heavily on credit cards for their everyday expenditures due to how convenient it is to have many credit cards and to have access to credit at any time. However, every cardholder’s top concern is not being able to pay off their credit card balance for a legitimate reason, such as a loss of income, a handicap, or any other.
In the event of an unforeseeable circumstance where the cardholder is unable to pay the credit card payments because of a loss of income, disability, injury, or death, a credit card insurance plan offers financial protection to the cardholder.
In addition, it broadens its scope to include credit card scams involving both online and physical transactions. Frauds involving PIN-based transactions, phishing, contactless transactions, tele-phishing, etc. may be covered under this.
In the event of credit card theft or loss, several plans provide a single-call card block service.
Risks of using a credit card to pay for medical expenses:
You should be aware of the risks in addition to the benefits of charging medical expenses to a credit card. The main drawbacks are primarily financial, as we will describe below.
High rates of interest
To begin with, the typical APR for credit cards is currently edging closer to 18%. The interest fees you’ll accrue over time if you charge medical bills to a credit card and wait a while to pay them off could be astronomical.
No negotiation skills
You won’t be able to haggle with medical professionals if you pay with a credit card. Remember that certain medical facilities might give you a discount if you pay your complete amount up front or they might provide lengthy interest-free payment plans. If you use a credit card to deliver, they receive the money, and you are now responsible for paying off the medical debt.
You might want to think about getting a personal loan instead if you need to bear medical debt for a long time. Personal loans for those with good credit not only have interest rates around 6%, but they also have fixed monthly payments and repayment plans so you know exactly when you’ll be debt-free.
How to pick the ideal card for paying medical bills?
There are actions you may do to lessen the drawbacks if you intend to charge medical expenses to a credit card:
Calculate the amount of debt you have to pay off.
You should first take some time to estimate how much money you will ultimately repay in medical costs. A card with rewards and a temporary 0% APR offer can be a suitable choice if your medical debt is manageable.
Consider personal loans, medical loans, and 0% introductory APR credit cards with longer offers if the amount is large and you’ll need as much time as possible to pay it off.
Pick if you wish to get incentives.
Some medical credit cards give benefits for every dollar you spend, but not everyone needs this kind of temptation in their life. After all, since you know you’re getting something in return, cash-back credit cards may tempt you to spend more.
Earning points for purchases is typically only worthwhile if you avoid credit card interest. Because of this, you should only think about getting a rewards credit card if you’re also avoiding interest for a brief period of time and if you’re confident that you can pay off your medical debt before the card’s introductory APR offer expires.
What is a medical credit card?
Dentists, ophthalmologists, audiologists, cosmetic surgeons, and veterinarians may all provide medical credit cards. They differ from conventional bank credit cards in that they can only be used to pay for healthcare and only at participating healthcare facilities, unlike standard bank credit cards.
However, when you make a purchase using a medical credit card, you are actually borrowing money to pay your physician, dentist, or other healthcare professional. Examine the costs and interest rates, and weigh your options before taking out a medical credit card (like an existing credit card).
Do Medical Credit Cards Outperform Regular Credit Cards?
Although you can charge medical expenses on both medical credit cards and regular credit cards, medical credit cards have more limitations. Only when the hospital or service provider accepts that specific method of payment, can you use a medical card to pay for some qualified medical charges?
Deferred-interest medical credit cards shouldn’t be mistaken for conventional credit cards with a 0% APR. If you make the minimum payments on time with a conventional credit card, you won’t be charged interest throughout the promotional period.
Due to their restricted applicability, often higher interest rates, and deferred interest offerings, medical credit cards, according to Duren, are most akin to retail shop credit cards.
Traditional and medical credit cards do share one thing in common: They both have an impact on your credit. If your credit score or other criteria don’t fulfil the requirements of the issuer, you risk having your application for a medical credit card declined.
Additionally, at least one of the credit bureaus is typically informed of any payment activity on a medical card. Missing payments will lower your credit score even while good payment behaviour isn’t always reflected.
Is Using a Medical Credit Card Advisable?
If you use a credit card to pay for a medical operation and don’t pay it off soon away, you could incur steep interest charges.
According to John Ulzheimer, a credit analyst who previously worked at the credit reporting agency Equifax and the credit analytics firm FICO, “if you insist on charging medical treatments, you’re better off just using a general-use credit card.” The APR “will probably be significantly lower.”
Depending on your options, you may or may not want to use a medical card to cover your medical costs. If you can find a medical credit card with a 0% APR offer and are confident you can pay off the balance within the promotional term, that card may be a suitable choice.
However, it may not always be the best choice. It might be wiser financially to use credit cards or loans that have a lower APR and no chance of postponed interest.
Before applying, think about these alternatives to medical credit cards:
credit cards with a fixed interest rate are common. Deferred interest is often not available on traditional credit cards with 0% interest offers. This means that only any sum that is left after the promotional time has ended will be subject to interest charges.
