Using credit cards to pay for your purchases can attract some really great benefits including airline miles and hotel points, but what happens when you have to pay for a medical bill that skyrockets to more than $1,000? Should you make the purchase using your credit card? Or opt for any other option available to you?
It cannot be emphasized enough that medical bills can get overwhelming very easily. A single visit to a doctor can cost you anywhere between $50 and $300, and a recommended surgery, test and medication are just another addition to the total cost. And the next thing you know, you are slapped with a medical bill that far exceeds your expectations.
And of course, desperate times call for desperate measures. Like with many other purchases in our culture, we charge our out-of-pocket medical bill to our credit cards without even looking for an alternative.
Unfortunately, what majority of the people don’t know, is that there is an underpublicized reason why you should never pay for your medical bills using a credit card, and we want to explain it today in this article.
Medical bills are rather lenient!
When it comes to medical bills, America is at an impasse. The most important thing you should know is that you are not alone when you have medical debt. There are millions of families who have been affected by it. Moreover, it has become a key concern of your government and has also caught the attention of FICO and the credit bureaus, so that a medical debt should have less of a negative influence on your credit score.
But the major implication here is that healthcare providers are usually lenient with the way they are being paid. Obviously, it isn’t true for every healthcare provider, but it is for the majority of them.
Now how does it help you? Well, it can attract some of the following benefits for you:
Partial payment acceptance without penalty
Zero or low interest rates
Long-term payment plans
We’ll also talk about these benefits later in this article and but first let’s talk about paying your medical bills using a credit card.
Can You Pay Medical Bills Using a Credit Card?
In short, Yes. The medical bills can be paid using your credit cards. Most healthcare providers will give you various options to pay your bills through debit cards, e-wallets etc. But does that mean that you should pay your medical bills through a credit card. In short, no. Paying your medical bills through credit cards is not the most preferable mode. Here’s Why.
Don’t use credit card for medical bills
So why exactly it is not a good idea to use credit card for your medical bills? It’s simple maths, if you are unable to pay the full amount before the billing cycle ends, you will be subject to interest, and this would certainly result in an expensive repayment.
Why undergo such an expensive affair when other options are available.
What other options are available?
Medical bills are dreadful, but one way to make them way more horrifying is to pay an additional interest on the amount you owe. And you will be doing just that by paying your bills with your credit card. Suddenly, a $5,000 bill becomes $6,250 with an interest charge of 25% which means you will be paying more than you actually owe.
Hospital in-built payment plan – Hospitals and health clinics offer more negotiable interest rates on your medical bills, and until the bill goes to the collection team – you are most likely to have only a slight increase in the original bill amount if you choose a hospital payment plan. Moreover, there are various hospitals that do not charge any interest at all. And thus, it becomes crucial to do your homework before you plunge into paying your medical bills with credit cards.
Healthcare cards – Healthcare cards are yet another great option when it comes to paying for medical bills. However, it is no way a replacement for hospitalization cover, but offers you discounted rates on health, medical and drug expenses for a monthly or annual paid membership. While the health insurance policy does not cover doctor consultation, radiology and pathology expenses, there are no such sub-limits in case of healthcare cards.
Patient financing – Patient financing is an option that not only lets you afford the treatment but also pay for high medical bills in easy monthly payments. Moreover, even if you have a low credit score, you are still qualified for a financing option. Denefits is one such company that offers financing option with instant approval, zero or low interest rate and no credit check to all patients. Denefits offers a healthy and simple option that allows you to spread your healthcare expenses over months or years and pay the cost in easy and affordable monthly payments. With Denefits, you no longer have to block your funds to pay off your medical debt.
Paying off your medical debt using a credit card might seem tempting, but it can result in more financial stress for you. Thus, with several alternatives available, paying for your expensive medical bills using a credit card makes no sense especially for those without insurance. In fact, it doesn’t just apply to credit card, even when you plan on paying for your debt in cash, you are basically blocking your money which can be used for other expenses.
You may be able to get hold of a small percentage of discount when you pay your bill in cash but you are being sucked into a situation where if any emergency emerges you have nowhere to go especially if you have used all of your cash.
So, it is important that you always research beforehand and find the most suitable way to pay off your debt.