Learn the ins and outs of medical credit cards so that you can determine if they are a good choice for you as you build wealth…
As the number of credit card companies and offerings continue to rise, so too are the number of credit card offerings increasing by those in the health care and medical industry. As the year 2024 starts, the creator of TheWealthIncreaser.com thought that it would be an appropriate time to discuss credit card debt. And with many running up credit card balances during the holiday season, this discussion is more relevant than most for many consumers.
Medical credit cards in specific will be focused on in this discussion as they are increasing in popularity at this time, and you want to proactively be aware of the advantages and disadvantages so that you can achieve more throughout your lifetime.
In this discussion TheWealthIncreaser.com will show the importance of scrutinizing medical credit cards to see if they are a good or best choice for you as you build wealth as they are now being offered by many health care providers.
Medical credit card basics
You must determine (when possible) prior to going to a medical office or health care provider if the credit that they offer to you is your best choice. You want to look at the terms, and other factors to determine if medical credit cards are your best option based on your current financial and health position.
Before you decide to borrow by selecting a medical credit card you want to first get an itemized version of your bill from your medical provider and check it for errors as charges are on occasion wrong and you would want to talk with your insurer and medical provider to get the errors corrected to even see if borrowing for your medical balance is even necessary.
Medical credit cards are issued by credit providers–NOT–your medical provider and the major credit providers in the medical industry include the following.
Major providers of medical credit cards include:
*Synchrony
*Care Credit
*Wells Fargo Health Advantage
*Alphaeon Credit
*Barclays
*Others
Advantages of medical credit cards
- You may be offered zero percent interest for a stated time period
- They allow you to get medical services that you need when you otherwise could not get them
- Often used to fill financial gaps caused by high deductible and/or out-of-pocket costs
- Medical provider gets paid quickly
- If you pay off during zero percent introductory period, you can possibly avoid fees
Disadvantages of medical credit cards
- With many you can only use the cards for medical purposes, and they are marketed on the spot causing you to make a stressful decision under less-than-ideal conditions
- Fees can be higher than with traditional credit cards (be sure to pay off before high fees kick in). If you don’t pay off within the zero percent interest period, you could face steep fees as the terms on the cards may not be the best that are available. Depending on your credit, you can often find better terms elsewhere in the open market
- Your doctor or medical office is not the lender–the financial institution or credit card company is
- Medical credit cards require credit approval–and setup, and establishment is often of more benefit to medical provider than to you
- Once introductory period ends you could be charged 25% or more on the entire balance (full original balance), NOT what you owe at the end of the introductory period
- You may waive the 1-year agreement for unpaid medical collection debt that Transunion, Equifax, and Experian agreed to during the recent credit reforms. However, by putting balance on your medical credit card that would also go on your credit report. And if you were unable to pay using your medical credit card, you wouldn’t be able to negotiate or resolve problems directly with your medical provider, nor would the 1-year agreement for unpaid medical collection apply to your debt
Conclusion
In the current economy and future economies, you can expect the proliferation of medical credit cards to increase, and in this discussion, you have learned some of the advantages and disadvantages of medical credit cards along with the basics of what they are and whether they can possibly be of benefit to you and your family.
Health insurance and the coverage provided can sometimes be difficult to decipher, therefore consider assistance through charitable or other low-cost programs that may be offered by hospitals and non-profits.
Some hospitals offer financial assistance and other counseling services. You may want to ask what the Medicare rate is and then “negotiate that lower cost for your payment” as some hospitals are flexible in payment amounts and payment options “if” you negotiate and are not shy. Start off the negotiation by stating that you have limited resources but would like to pay if the amount is reasonable based on your budget. Be sure to get the agreement in writing!
If you end up selecting a card, be sure you use the card with caution! As is the case with other credit cards, once your balance goes on the card, you lose the opportunity to challenge the balance or negotiate a discount or a better payment plan.
Also be aware that the more “sign-ups” a medical provider gets at their office, medical credit providers may “lower the fees” that their office pays to them–thereby providing incentive to get them to promote medical credit card sign-ups more aggressively. Also realize that medical collection debt “under $500” and medical debt that has been “paid off” will no longer appear on your credit reports due to new credit law adjustments that occurred in 2022.
It is up to you to determine and decide if medical credit cards can be of benefit to you and your family as you must decide if medical credit cards can move you forward and increase the odds of paying off your medical debt in a more appropriate manner.
You want to analyze medical credit cards in a careful, critical, analytical and accurate manner so that you don’t put yourself in position where the cards are doing more harm than good!
With many medical credit cards, if you were to owe $1,000 and pay all of the balance except $100, during the introductory period–you would normally owe 25% on the $1,000, not the $100! You would owe $250 as opposed to $25–meaning you are being “taken to the bank” by the medical credit card company (paying a very high fee for their services)!
Whether medical credit cards can hinder or advance your wealth building efforts will depend on where you are now at with your finances, how you utilize them, how you utilize other credit options that may be available to you and how you manage your overall finances (your money management personality) on a consistent basis.
All the best to your new vision of credit card and wealth building success…
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