How to use a credit card to cover health expenses

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Medical bills can be some of the biggest expenses most Americans ever face, which is why many people turn to credit cards for medical bills. If you can’t cover medical expenses out of pocket, should you put them on a credit card?

While using credit cards for medical expenses can help you cover a surprise medical bill, high interest rates could end up pushing you into debt. It’s a good idea to consider all of your options before paying your hospital bill with a credit card since combining big medical bills and credit could cost you a lot of money in the long run.

One of those options is to use a credit card with a 0 percent intro APR rate, which will give you a period of time to pay off your medical bill before it starts accruing interest. If you already have medical debt on a high-interest credit card, a balance transfer could help you save money as you pay off your bills.

Here’s what you need to know about using credit cards for medical expenses—including how medical bills affect your credit, whether you should consider a medical credit card and which credit cards give you the best opportunity to pay down your medical bills without increasing your debt.

Using a credit card to cover medical expenses

Can you pay a hospital bill with a credit card? Yes. Should you? It depends. Using credit cards for medical expenses can help you out in a pinch, but combining medical bills and credit could increase your credit card balances, lower your credit score and saddle you with credit card debt that might be difficult to pay down.

If you want to use a credit card for medical bills, your best choice is to sign up for a 0 percent intro APR credit card. These credit cards offer temporary zero-interest periods that often last for over a year, giving you time to pay off your medical debt before it starts accruing interest. Applying for a zero-interest credit card and using that credit card for medical expenses is the best way to put medical bills on credit.

Putting medical bills on a high-interest credit card, on the other hand, is asking for trouble. Credit card interest compounds, which means that carrying a high balance on a high-interest card could add a lot of extra money to your debt. If you have to use a high-interest credit card for medical expenses, apply for a balance transfer credit card as soon as possible. Like 0 percent intro APR credit cards, the best balance transfer credit cards give you a year or more to pay off your transferred balance without accruing interest—which will give you a chance to pay off your medical bill without being overwhelmed by interest charges.

How medical debt affects your credit

Medical debt is just like any other kind of debt—if you don’t manage the debt responsibly, it can damage your credit history and lower your credit score.

If you pay your hospital bill with a credit card, your debt becomes part of your credit history. Since your medical bills are added to your credit card balance, they can affect your debt-to-credit ratio and potentially lower your credit score by reducing your available credit. Your credit card payment history will also affect your credit score, so keep that in mind before you use a credit card for medical bills. If you start missing credit card payments due to medical debt, your credit score could take a serious hit.

The same rules apply if you use a medical loan or a personal loan to pay off your medical bills. The debt will appear on your credit report and could have either a positive or a negative effect on your credit score depending on how it affects your credit mix, available credit, payment history and so on.

What if you don’t put your hospital bill on credit and decide to work out a payment plan with the hospital instead? Many people don’t realize that medical providers don’t report medical debt to the three major credit bureaus. If you negotiate with a hospital to pay off medical debt in installments, the hospital does not report your payment plan to Experian, Equifax and TransUnion. Your medical debt does not affect your debt-to-credit ratio. On the flip side, your on-time payments also aren’t included in your credit report as proof of positive payment history.

That said, if you fall behind on your medical payments and the hospital sells your debt to a collection agency, your unpaid debt could turn into a derogatory mark on your credit report. According to Experian, all three credit bureaus offer consumers a 180-day waiting period to resolve unpaid medical debt before the collection account will appear on your credit report. This gives you a chance to pay off your debt or negotiate a settlement—so do your best to resolve your unpaid debt before it has the chance to damage your credit.

Medical credit cards

Should you use a medical credit card like CareCredit to pay your hospital bills? Well, you should read the fine print before you enroll. Some medical credit cards offer deferred interest plans, which allow you to defer the interest on your medical bills for a limited period of time. Unfortunately, many people don’t realize that once the deferred interest period ends, the credit issuer will charge back interest from the date of the charge on any balance remaining on the account.

If you don’t pay off your medical bills in full before your deferred interest period runs out, you could end up owing a lot more interest than you were anticipating—especially because medical credit cards often charge higher interest rates than today’s best credit cards.

Best credit cards to pay medical bills

If you need to take out a new credit card to pay for medical bills, look for a card that offers an introductory 0 percent APR period. Use that temporary zero-interest period to pay off as much of your medical bill as possible; that way, you’ll save money on interest charges. If you are already putting medical bills on a credit card, you might want to consider transferring your unpaid balance to a balance transfer credit card. Like introductory zero-interest cards, most balance transfer credit cards offer a temporary 0 percent interest rate on transferred balances—giving you the chance to pay off your medical bills without accruing interest.

Here are three credit cards that you can use for medical bills, balance transfers or both:

Citi® Diamond Preferred® Card

The Citi® Diamond Preferred® Card offers 18 months of 0 percent intro APR on both purchases and balance transfers (13.74 percent to 23.74 percent variable APR thereafter), making it an excellent option for people who want to cover a large medical bill or transfer a large balance.

If you’re ready to make a budget and tackle your medical expenses before the intro APR period runs out, the Citi Diamond Preferred Card can help you put medical bills on credit, and you’ll get a year and a half to pay your balance down before you’ll need to start paying interest.

You’ll be more likely to be accepted for the Citi Diamond Preferred if you have excellent credit, so keep that in mind before deciding to apply. This card also has no rewards program.

Discover it® Cash Back

The Discover it® Cash Back offers 14 months of a 0 percent intro APR on purchases and balance transfers (11.99 percent to 22.99 percent variable APR thereafter). It also offers some of the best cash back rewards in the industry, making the Discover it Cash Back a good choice for people who want to pay off medical debt while earning rewards on new purchases.

The Discover it Cash Back is a rotating category rewards card, offering 5 percent cash back on bonus categories that rotate every quarter (for up to $1,500 in purchases per quarter upon activation, then 1 percent) and 1 percent on all other purchases. That means you can actually get some money back for putting your medical bills on this card. It also means that it’s a great addition to your wallet beyond the intro APR period you can use for medical bills. This year, Discover’s bonus categories include Amazon.com, CVS, select streaming services and more. You can use Bankrate’s guide to Discover’s rotating categories to help you decide whether the Discover it Cash Back card might be right for you.

Even if you don’t take advantage of all of Discover’s rotating cash back categories, you can still use the card to pay off a medical bill before it starts accruing interest—and thanks to Discover’s Cashback Match program, any cash back rewards you earn in your first year as a cardholder will be matched.

Citi Rewards+® Card

The Citi Rewards+® Card offers 15 months of a 0 percent intro APR on purchases and balance transfers (13.49 percent to 23.49 percent variable APR thereafter). It also gives you the opportunity to earn Citi ThankYou Points that can be redeemed for statement credits, booking travel and more.

How many ThankYou Points can you earn? It depends on what you buy—and how quickly your points round up. Cardholders earn 2X ThankYou Points per dollar at supermarkets and gas stations on up to $6,000 in combined purchases each year and 1X points per dollar on all other purchases. All of the points you earn get rounded up to the nearest 10 points, which means that if you stop into a grocery store and spend $2 on a bottle of water, the 4X points you earn on the purchase will round up to 10 points.

Want even more points? For a limited time, the Citi Rewards+ Card offers new cardholders 20,000 bonus points after spending $1,500 in the first three months. Plus, you get 10 percent points back for the first 100,000 points you redeem each year.

All of these point-earning opportunities make the Citi Rewards+ Card a good option if you want to pay off medical bills while earning rewards that can then be put toward your credit card statement.

Alternatives for paying for unexpected medical expenses

If you find yourself facing unexpected medical expenses, it’s important to consider your options. Some people are able to pay unexpected medical bills with their emergency fund, but many find themselves in a position where they have to pay their hospital bills with a credit card.

If you don’t want to use a credit card for medical bills, here are some other ways to cover an unexpected medical expense:

  • Negotiate a payment plan. Many hospitals and medical providers will work with you to create a payment plan that you can afford. Instead of paying off your medical bill in a lump sum, you’ll pay it off in installments.
  • Take out a medical loan. Medical loans are designed to help people cover both unexpected and elective medical expenses and may offer lower interest rates than credit cards—especially if you have good credit.
  • Take out a personal loan. Like medical loans, personal loans often come with lower interest rates than credit cards, which means you could save money on interest charges.
  • Borrow money from family or friends. According to a 2019 Bankrate survey, 60 percent of Americans have lent cash to help out a loved one. You might have people in your life willing to help you out of a tight spot if you let them in on your situation.
  • Try crowdfunding. Many people use platforms like GoFundMe to help cover unexpected medical expenses. Just keep in mind that you might not be able to crowdfund the full amount of your medical bills.

Bottom line

Even though many of the top credit cards for medical expenses offer rewards, don’t let the allure of earning cash or points for your purchases cause you to charge more than you can afford. Paying off credit card balances, even with a 0 percent intro APR rate, can be difficult enough without adding new balances every month. If you’re going to use a credit card for medical expenses, use it wisely—and try to get those medical bills on credit paid off as quickly as possible.