What Is a Medical Credit Card? Should I Get One?
Key takeaways:
Medical credit cards are designed to help you pay off healthcare expenses over time — often in 6 months to 3 years or longer.
Like traditional credit cards, opening a new medical card or making late payments can affect your credit score.
Consider other options like provider payment plans, discounts, and even traditional credit cards with a 0% introductory interest rate before using a medical credit card. These alternatives can help you reduce costs and avoid paying interest.
There are times you may have healthcare expenses you’re unable to pay. To handle healthcare bills, you might consider turning to a medical credit card. In fact, there are credit cards that are marketed specifically for emergency care, elective procedures, and dental services.
Before relying on a medical credit card, however, you should consider all your medical financing options. In the end, paying with plastic of any kind could mean paying a lot more than the original cost of your care and lead to medical debt.
What is a medical credit card?
Medical credit cards are typically offered through healthcare providers such as physicians, veterinarians, dentists, and even hospitals. Unlike major credit cards, you can’t use them for cash advances or to purchase items like groceries, gasoline, or airline tickets. The cards are only accepted by participating medical providers for certain medical services or procedures.
How are medical credit cards different from traditional credit cards?
Medicalcredit cards work very similarly to other types of credit cards. But their use is limited, and they often don’t come with rewards.
Similarities:
Payments are made over time.
Interest is charged on balances.
They may offer interest-free periods when you first open an account.
Use and payment activity on the cards is reported to at least one of the three major credit bureaus
Opening an account can temporarily ding your credit score.
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Differences:
Medical credit cards can only be used for certain purchases with certain healthcare providers.
They don’t have rewards or incentives for purchases like traditional credit cards
Most major credit cards report your use and payment activity to one — or more — of the three major credit bureaus. Since medical credit cards are a type of credit card, your credit score may drop up to 5 points when you apply for the credit card. This is called a “hard inquiry” and may affect your credit score for a few months.
Medical credit card options
Medical credit cards aren’t nearly as plentiful as major credit cards. You’re likely to come across only two: CareCredit and Wells Fargo Health Advantage.
Another popular option to pay for healthcare expenses is AccessOne. While it’s a payment plan and not a credit card, it’s similar to a medical credit card in that you can add new healthcare balances to your account.
The chart below shows how these three choices compare.
Card | APR | Pros | Cons |
• Online tool to check if your provider accepts it | • High interest rates | ||
• May offer a 0% APR special terms promotion with no deferred interest accruals | • Can only be used for dental, hearing, vision, and veterinary costs | ||
AccessOne (Note: This is a medical payment plan, also known as a charge account.) | • 0% and low-interest plans available | • Late payments or payments below minimum can convert no-interest account into one with interest |
Applying for a medical credit card
A medical credit card application is similar to applications for other types of credit accounts. You must provide information about your income, employment, and whether you rent or own your home. Your application may require a credit check, too.
Each medical credit card issuer has its own standard for accepting applicants. If you’re approved, you’ll receive account information and usually the ability to charge on the account immediately.
Medical providers and locations that accept a medical credit card typically have information on how to apply for the card. In some cases, you may be able to apply in-person at the time of service or apply online prior to receiving treatment.
Is a medical credit card worth it?
Using any type of credit card for healthcare expenses can allow you to receive care and pay the bill over time.
But depending on your situation, you may be better off paying healthcare expenses with something besides a medical credit card. Unlike a medical credit card, using one of the following options can mean you earn perks, have a lower interest rate, or borrow from your assets.
A traditional credit card that offers cash back, reward points, or airline miles
A personal loan
A home equity line of credit
A 401(k) hardship withdrawal specifically to pay medical bills
A 401(k) loan
A medical loan, such as a Care Now, Pay Later program
The bottom line
A medical credit card can help you pay for healthcare. While similar to a traditional credit card, your use of a medical credit card is typically limited to care with certain healthcare providers. You also won’t earn perks and your activity will be reported to at least one of the credit bureaus.
Other options may have lower interest rates or help you avoid debt altogether. They include a personal loan, home equity line of credit, 401(k) hardship withdrawal specifically for medical expenses, or a retirement account loan.
Why trust our experts?
References
AccessOne. (n.d.). Frequently asked questions.
AccessOne. (2022). Important information regarding your AccessOne account.
Axelton, K. (2020). How long do hard inquiries stay on your credit report? Experian.
CareCredit. (n.d.). CareCredit FAQs.
Wells Fargo Health Advantage. (n.d.). Credit card agreement.
This article is solely for informational purposes. This article is not professional advice concerning insurance, financial, accounting, tax, or legal matters. All content herein is provided “as is” without any representations or warranties, express or implied. Always consult an appropriate professional when you have specific questions about any insurance, financial, or legal matter.
