Health care costs can be shockingly high, even for those with insurance. For example, 2022 Healthcare.gov plans have a maximum out-of-pocket limit of $17,400 for families and $8,700 for individuals. That’s a lot of money for an insured person, especially with the extra financial difficulties some face due to COVID-19.If you don’t have money in the bank or in a health savings account (HSA) to cover medical expenses, it’s possible you’ll be stuck charging medical expenses on a credit card. It may be a necessity, particularly if you don’t have an emergency fund for medical bills, but it’s important to be aware of the risks. Credit cards tend to have high interest rates and aren’t designed to earn rewards on medical purchases. However, some cards may allow you to pay off your medical debt as quickly as possible. A balance transfer card or a card with a lengthy zero-interest period may be your best choice for paying your medical bills with plastic.
Risks of paying medical bills with a credit card
Before you sign up for a credit card to pay medical bills, be aware of the potential downsides.
High interest rates
For starters, the average credit card APR is currently over 16 percent. If you charge medical expenses to a credit card and take a long time to pay them off, the interest charges you’ll pay over time could be exorbitant.
No ability to negotiate
If you pay with a credit card, you’ll no longer be in a position to negotiate with medical providers. Keep in mind that some hospitals might offer a discount if you pay your entire bill in full, or they may also offer long-term payment plans without interest. If you pay with a credit card and they get their money, your medical debt becomes your problem to deal with.
If you need to carry medical debt for the long-term, you may want to consider a personal loan instead. Not only do personal loans come with interest rates as low as 4.99 percent for consumers with good credit, but you’ll get a fixed monthly payment and a repayment timeline that will let you know exactly when you’ll be debt-free.
Best credit cards for medical expenses
Despite the risks, using a credit card for medical expenses can make sense, particularly if your bills are low enough you can pay them off within a few months or slightly longer.
If you’re thinking about this option, here are some of the top cards you should consider and why they could work well for medical debt.
CareCredit: Best for in-house medical financing
If you want to apply for a line of credit to cover medical bills and prefer to handle this within your doctor or dentist’s office, you may want to check out CareCredit. While not a traditional credit card, CareCredit is a line of credit offered by medical professionals whose customers need help with their medical bills.
Once you’re approved, CareCredit lets you borrow money to cover medical expenses and pay them off over time. Depending on your credit score, you may even be able to qualify for financing for six to 24 months without any interest, provided you pay your entire bill off during that time. You can then extend your financing period with a 24-to-60-month reduced APR period if you need more time, but this “reduced” interest is on par with or higher than many credit card interest rates.
If you owe a lot for medical expenses and you feel you cannot pay off your bills in full within the promotional period you qualify for, back interest will be charged on the total amount from the purchase date. For that reason, CareCredit is usually best for people who have a small amount of medical debt they can pay off within a short amount of time.
- Zero percent interest promotional offers
- In-house financing
- Paying medical bills off quickly and before the promotional period ends
The information about CareCredit has been collected independently by Bankrate.com. The card details have not been reviewed or approved by the card issuer.
Chase Freedom Unlimited®: Best for rewards on medical and drug store needs
You’ll earn an extra 1.5% cash back on everything you buy (on up to $20,000 spent in the first year). That’s 6.5% on travel purchased through Chase Ultimate Rewards®, 4.5% on dining and drugstores, and 3% on all other purchases. After the first $20,000 you earn at least 1.5 percent cash back on all purchases, including medical spending. What’s more, you can even rake in an unlimited 5 percent on Chase Ultimate Rewards travel and Lyft purchases (Lyft offer valid through March 2022), plus an unlimited 3 percent back on dining and drugstore purchases. These excellent pharmacy rewards mean the Chase Freedom Unlimited can double as your go-to drugstore credit card.
You can also qualify for 0 percent APR on your purchases for 15 months (14.99 percent to 23.74 percent variable APR thereafter), which may be enough time to make a huge dent in your medical bills without having to pay any interest. Once the first 15 months are up, however, you’ll be required to pay the ongoing variable APR, which is considerably higher. For that reason, you should charge medical bills to this card only if you feel you can pay them off within 15 months, or at least get pretty close.
- Zero percent APR on purchases for the first 15 months (14.99 percent to 23.74 percent variable APR thereafter)
- Earning rewards on medical spending, drugstore purchases and more
- Paying medical bills off during the intro APR period
Wells Fargo Reflect℠ Card: Best for generous 0% APR offer and card perks
If you’re not really interested in rewards and just want to avoid interest for as long as you can, consider charging your medical expenses to the Wells Fargo Reflect℠ Card. This card will give you a full 18 months to pay down expenses charged to your card without a dime in interest charges with its intro APR offer on purchases from account opening (up to 21 months with on-time minimum payments during the intro period). The APR after the intro period ends is 12.99 percent to 24.99 percent variable.
The 0 percent interest offer also applies to qualifying balance transfers, so this card is yet another option to consider if you have medical debt lingering on other cards with much higher rates. Just be aware of the 3 percent balance transfer fee (minimum $5, whichever is greater) that must be paid upfront for each balance transfer you make within 120 days of account opening. After 120 days, the balance transfer fee is 5 percent (minimum $5).
You can also avoid paying an annual fee with this card, and you’ll get benefits like cellphone protection, easy access to your FICO credit score, secondary auto rental insurance coverage, travel accident insurance and roadside dispatch.
- Anyone who wants a long introductory APR offer for medical bills
- Consolidation of medical debt
U.S. Bank Visa® Platinum Card: Best for consolidating medical debt
Finally, consider the no-annual-fee U.S. Bank Visa Platinum Card if you have a lot of medical debt on other credit cards and need a way to consolidate and pay it down.
It’s one of the best balance transfer credit cards on the market today because you get a whopping 20 billing cycles of 0 percent intro APR on both balance transfers and purchases (then 14.49 percent to 24.49 percent variable APR). You won’t earn rewards with this card, but it has a few other valuable benefits, such as cellphone protection.
- Those who need longer than 18 months to settle their balance
- Those looking to save money on cellphone insurance
- Consolidating medical debt and other account balances onto one card
How to choose the best card to pay for medical expenses
If you plan to charge medical expenses to a credit card, there are some steps you can take to minimize the downsides:
Figure out how much debt you have to pay off
First, you should spend some time figuring out how much you’ll owe in medical bills when all is said and done. If your medical debt is manageable, a card that offers rewards and a limited-time 0 percent APR offer may be a good option.
Decide if you want to earn rewards
Some cards for medical expenses offer rewards for every dollar you spend, but not everyone needs this kind of temptation in their life. After all, cash back credit cards can entice you to spend more since you know you’re getting something in return.
For the most part, earning rewards on purchases only makes sense if you’re avoiding credit card interest. For that reason, you should consider a rewards credit card only if you’re also avoiding interest for a limited time, and if you know you can pay your medical expenses off before your card’s introductory APR offer ends.
Compare 0% APR offers
Finally, be sure to compare introductory APR offers so you know what you’re getting in the end. Some cards offer 0 percent APR only on balance transfers, while others extend zero interest to both purchases and balance transfers for a limited time.
Also, watch out for “deferred interest” offers that will charge you back interest if you don’t pay your medical bills in full before your introductory period is over. While these kinds of offers are rare, they do exist. Read the fine print of any card you’re considering that has an introductory offer so you don’t unknowingly fall into the deferred interest trap.