Why Medical Credit Cards Should Make You Sick

Anyone who’s ever been in the no-insurance boat will tell you that going to the doctor on your own is expensive. For those of us with little or no medical coverage, medical credit cards may seem like a great solution to these exorbitant costs in that they promise that you’ll be able to pay off your procedures over time, without having to pay interest. But more often than not, it doesn’t work out like that.

Nope, not at all.

Medical credit cards can be used to pay for all kinds of medical expenses (you can even take your dog to to the vet), and they’ve been growing in popularity over the years. Citigroup, Wells Fargo, JP Morgan Chase and GE Capital all offer them now, but these companies aren’t really marketing them to consumers. Instead, they market them to doctors and other healthcare providers, who then offer them to their patients. They’re geared toward lower-income consumers – people who have little or no insurance coverage and who don’t have the means to pay for things up front. That’s who typically uses them. The problem is, that’s not who they’re good for.

Medical credit cards work best when they’re used by people who already have the financial resources to pay for elective procedures, so if you’re rich and thinking of buying yourself a new set of boobs, go for it. If you’re broke and you’re just trying to pay for your emergency dental surgery, on the other hand, think twice before signing up. Agreeing to pay a certain amount up front leaves little room for negotiation, so you could end up paying more than you should. And suppose your dental emergency requires multiple visits. If you pay for it all up front but then decide to change doctors or stop the procedure, getting your refund becomes a huge, complicated mess.

Sometimes the terms of the card are tricky too. These companies will tell you that you won’t pay interest as long as you pay your procedure off within a certain amount of time. What they don’t tell you is that if you’re only paying the minimum each month, there’s no way that’ll happen. Once you start down that road, you’ll be saddled with interest rates as high as 30%, which will often be applied retroactively.

Sometimes people are even led to believe that medical credit cards are more like payment plans. When they’re not able to cover the interest and fees, their credit takes a hit. These credit cards could also lead medical providers to pressure people into getting procedures they don’t want or don’t even need – a terrifying thought.

If you’re confronted with something you don’t think you can pay for, first try to negotiate the cost with your doctor. If you still don’t have the means to cover it up front, try to set up a payment plan. It’s better than just lunging for the nearest credit card emblazoned with a caduceus. And remember this: if the procedure in question is not an elective surgery and your income is low, you may qualify for public assistance.

The bottom line is this: avoid medical credit cards like the plague, pun intended. If you do sign up for one of these cards, you can protect yourself from unpleasant surprises down the road simply by reading the fine print. As far as habits go, this is one that’s really worth adopting.

Have you used a medical credit card before? Did it work out for you, or do you have a horror story? Either way, tell us about it in the comments.