Life is unpredictable, and people are struggling these days with the rising costs of health care. Even insurance companies offering health coverage have gaps in their proceeding, which is why lenders have now introduced medical credit cards.
What Is A Medical Credit Card?
A medical or health care credit card helps people pay off their medical bills when they don’t have ready cash to pay for such expenses. It is just like using a regular credit card.
Medical cards cover specific services like LASIK, cosmetic or dental surgery but may not cover every medical expense incurred. Broadly speaking, these cards are designed to pay for the following medical expenses:
- Eye doctors
- Cosmetic surgeons
Before applying for a medical credit card, check whether the healthcare provider accepts it or not. Reading a Service Finance Company review can help you decide whether it’s a good financer to partner with for your healthcare needs.
How Does a Medical Credit Card Work?
If it is acceptable for a medical service, you only need to pay your medical bill using your medical credit card after the credit card company approves it. The bills need to be cleared with the credit card company, not with the doctor.
Here are two defining features of a medical credit card that explain how it works:
1. Deferred Interest
A medical credit card comes with deferred interest. If the individual fails to pay off the debt before the period of deferred interest ends or delays payment for more than 60 days, they may have to pay all the interest built up since their original charge.
2. Medical Credit Card Agreement
The key terms and conditions are well explained by the healthcare provider before the borrower applies for the card. You must review the terms carefully, especially the period that the zero-percent interest rate lasts.
Comparison Between Medical Credit Card And Traditional Credit Cards
There are some similarities between both the cards, but there are points of difference as well. Let us compare the two:
- Medical credit cards, as compared to traditional credit cards, come with more restrictions. A medical card is accepted only by particular hospitals and doctors and for certain qualifying medical expenses, not all.
- Traditional credit cards come with a 0% APR, which means that you won’t be charged with accrued interest if minimum payments are paid. Medical credit cards come with deferred-interest.
- Medical credit cards are more like retail store credit cards, which have high-interest rates, deferred style of interest, and limited application.
- Just like traditional credit cards, medical cards also affect the credit rating of the borrower. Payment activity on a medical card, especially if you have faltered, is reported to the credit bureaus.
Medical Credit Cards: Pros And Cons
Below you’ll find a few advantages and disadvantages of using a medical credit card to finance your out-of-pocket medical costs:
Advantages Of A Medical Credit Card
1. Immediate Treatment
Many patients need immediate access to medical care with high deductibles and out-of-pocket costs. As a result, it causes delays in medical treatments. With medical credit cards, patients can get the treatment right away with immediate access to payment services.
2. Saves Cash
Medical credit cards let you conserve cash, and with medical cards, patients can spread their payments over some time.
3. Safe Record-Keeping
Medical cards can make record-keeping easier. Patients can keep all their out-of-pocket health care expenses in one place and budget well for care.
Disadvantages Of A Medical Credit Card
1. Big Interest Charges
The cards can generate big interest costs, which can also hurt your credit score if you miss just one payment.
2. Unfulfilled Treatments
You may use a medical card for dental services that require a few more sessions, which you are unable to complete. In such a case, the medical card may result in payment for treatment that you don’t get.
How To Apply For A Medical Credit Card
You can apply for a medical credit card either online or offline. The form can be submitted online by taking a medical card from Care Credit, for instance.
You need to submit your documents and proof to get access to this facility. You must provide details like your name, mobile number, address, date of birth, Social Security number, etc. You also need to fill in your doctor’s name or the procedure that you plan on purchasing.
Financial information like net income and housing information may also be required. The information is more health-related than financial, and the process required to start an application is minimal.
3 Important Things To Consider Before Using Medical Credit Cards
It is a quick fix to charge the unexpected medical debt on a medical credit card but eventually, it is a band-aid solution. Before using a medical credit card, one must consider the following factors:
1. Double-Check Your Charges
Your medical bills may contain some flaws or errors, so you should double-check them intently before paying anything. It is suggested to request an itemized bill to check if the services that have been charged are consistent with the care received.
2. Negotiate Your Bill
Compared to traditional credit card lenders, medical providers usually offer more flexibility when asking for a discount on the bill.
It is suggested to explain the financial situation to your healthcare provider, and there is a chance that the remainder of the balance gets forgiven. You can also negotiate an interest-free payment plan.
3. Apply For Financial Aid
In many states, hospitals are legally required to provide free or reduced medical services to people who qualify to depend on their personal, medical, and financial information. Even a reduction alone can make a large bill more affordable.
The Bottom Line
A medical credit card is a viable option if the individual needs to finance his healthcare-related procedures and services, even pet care.
The borrower should make sure that the balance is paid off in full by the end of the financing term so that sky-high interest rates are not applied. It is a great option to save on cash and not get into other hassled documentation.