Access to healthcare in the U.S. may have been somewhat improved by the passage of the Patient Protection and Affordable Care Act, but this sweeping law didn’t extend health insurance to every American. In fact, the Kaiser Family Foundation (KFF) reports that, during their last count in 2018, 27.9 million non-elderly individuals were without a health insurance plan.
Even those who do have health insurance can face some shockingly high costs in terms of annual deductibles and copayments. In 2020, for example, plans offered on the national Healthcare.gov website come with maximum out-of-pocket limits of $16,400 for families and $8,200 for individuals. That’s a lot of money for someone who actually has health insurance to begin with.
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. While it’s better to have an emergency fund for surprise medical expenses, paying with credit isn’t the end of the world. Of course, you’ll be a lot better off if you pick the right credit card for medical expenses, and if you pay off your medical debt as quickly as you can.
Potential risks of paying a medical bill with a credit card
Before you sign up for a credit card to pay medical bills, you should be aware of potential downsides. For starters, the average credit card comes with an APR, or interest rate, that’s well over 17 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 could be exorbitant in the end.
Another downside of paying medical expenses with a credit card is the fact that 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 for that reason. Not only do personal loans come with interest rates as low as 5.95 percent for consumers with good credit, but you’ll get a fixed monthly payment and a fixed repayment timeline that will let you know exactly when you’ll be debt-free.
With these issues in mind, using a credit card for medical expenses can make sense. This is mostly true if your medical 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 depending on your situation.
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 that is offered by medical professionals whose customers need help affording 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.
One downside of CareCredit promotional financing offers is the fact that they are usually “deferred interest” offers, meaning you can only avoid all interest payments if you pay your balance off entirely before the introductory offer ends.
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 expenses they can pay off within a short amount of time.
- Zero percent interest promotional offers
- In-house financing
- Someone who is certain they can pay their medical bills off quickly and before their promotional period ends
Best for 0% APR and flat-rate rewards
Chase Freedom Unlimited®
If you have a stack of medical bills to pay and you want to capitalize on the spending to earn rewards, as well as avoid interest payments for a time, the Chase Freedom Unlimited® is worth a look.
This card offers an initial bonus of $200 when you charge $500 to your card within three months of account opening, but you’ll also earn 1.5 percent cash back on everything you charge. You’ll also qualify for zero percent APR on any spending and other purchases for 15 months (14.99 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. However, once the first 15 months are up, you’ll be required to pay the ongoing variable APR, which is considerably higher. For that reason, you should only charge medical bills to this card if you feel you could pay them off within 15 months, or at least get pretty close.
- Zero percent APR on purchases for the first 15 months (14.99% – 23.74% variable APR thereafter)
- Earning rewards on medical bills
- Someone who can pay their medical bills off during the intro APR period
Best for 0% APR and bonus rewards categories
Capital One® SavorOne® Cash Rewards Credit Card
If your main goal is earning rewards on your medical expenses and you also use a credit card for dining, at grocery stores and entertainment, the Capital One® SavorOne® Cash Rewards Credit Card can make a lot of sense. This card comes out of the gate with a $150 cash bonus when you spend $500 within three months of account opening, but you’ll also earn 3 percent back on dining and entertainment, 2 percent back at grocery stores and 1 percent back on everything else you buy, which can help you rack up rewards fast.
This card also comes with a zero interest offer that applies to all your purchases, including medical bills, for 15 months (15.49 to 25.49 percent variable APR thereafter). This benefit extends to balance transfers as well, which can be crucial if you already have medical debt on other credit cards with much higher interest rates.
If you do sign up for this card to earn rewards on medical expenses and/or save money on interest as you pay down medical debt, we suggest charging only purchases and medical bills you know you can pay off within 15 months. After 15 months are up, you’ll be stuck paying off debt at a relatively high APR, which can make the process significantly slower and much more expensive.
- People who spend a lot on dining, entertainment and at grocery stores
- Earning rewards on medical bills
- Saving money with an introductory APR period
Best for generous 0% APR offer
Wells Fargo Platinum card
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 Platinum card. This card will give you a full 18 months to pay down expenses charged to your card without a dime in interest charges (15.49 to 24.99 percent variable APR thereafter).
The zero 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.
You can also avoid paying an annual fee with this card, and you’ll get benefits like easy access to your FICO® credit score with Wells Fargo Online® each month, 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
- Someone who isn’t interested in earning rewards
Best for consolidating medical debt
Amex EveryDay® Credit Card
Finally, consider the Amex EveryDay® Credit Card from American Express if you have a lot of medical debt on other credit cards and need a way to consolidate and pay it down. This card is one of the best balance transfer credit cards on the market today because you don’t have to pay a balance transfer fee on transfers you initiate in the first 60 days of account opening. You also get zero percent APR on purchases charged to your card, and balance transfers, for 15 months (14.49 to 24.49 percent variable APR thereafter), which is ideal if you have debt to consolidate and even more medical bills on the way.
You can also earn an initial welcome bonus of 15,000 Membership Rewards points when you charge $1,000 in expenses on your card within three months of account opening, as well as ongoing rewards on your spending. However, it’s best to steer clear of charging new purchases to a credit card if your main goal is consolidating medical debt so you can pay it off. You will get to avoid interest on this card for 15 months (14.49 to 24.49 percent variable APR), but any debt you still have after the introductory offer is over will begin accruing interest at a much higher rate.
- Balance transfers with no fee in the first 60 days
- Consolidating medical debt and other bills
- Earning rewards once you’re debt-free
The information about the Amex EveryDay Credit Card from American Express has been collected independently by Bankrate.com. The card details have not been reviewed or approved by the card issuer.
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 reduce your exposure to the downsides of this strategy. Here are some tips you should consider.
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 isn’t too substantial, it’s possible a card that offers rewards and a limited time zero percent APR offer on purchases is your best bet.
If you need to charge a lot and you need as much time as possible to pay it off, on the other hand, you should compare zero percent APR credit cards with longer offers as well as personal loans and medical loans.
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 only consider a rewards credit card 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, make sure you do compare introductory APR offers so you know what you’re getting in the end. Some credit cards only offer zero percent APR 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. Make sure you read the fine print of any card you’re considering with an interest offer so you don’t unknowingly fall into the deferred interest trap.