What Is a Medical Credit Card?

Have you ever found yourself with a surprise medical bill and been shocked by just how high it was? Even with insurance or Medicare, you could have high out-of-pocket (OOP) costs. In 2022, the OOP maximum for a family with insurance is $17,400, which means that even if you have coverage, you could be on the hook for a good deal of money.

If you’re looking for ways to pay for large medical expenses, a medical credit card could be right for you. We’ll walk you through some pros and cons of medical credit cards, show you a few of the more popular cards available and provide you with information about other ways to pay your medical bills.

A medical credit card is similar to a regular credit card, except they are specifically for people with medical expenses. Some providers may even partner with some of these companies to help you pay for procedures.

Before you apply for a medical credit card, make sure that it covers the treatments you need.

The answer is: it depends. For some people, a medical credit card could be the right option to pay some bills. For others, there are alternatives to make paying medical expenses easier.

Medical credit cards come with their own unique advantages and disadvantages. This chart covers a few reasons why it might be a good idea to pay your medical bills with a card and a few reasons to think twice before applying for one.

Below you’ll find information about some of the most popular medical credit cards and several options that aren’t specifically medical credit cards but still provide a good introductory interest rate or balance transfer benefits.

CareCredit® credit card

The CareCredit card is a credit card for medical bills. Its specific purpose is to help people pay for medical expenses that their insurance doesn’t cover. Hundreds of thousands of providers accept the card in the United States.

Wells Fargo Health Advantage® Card

With a lower introductory rate than other cards (12.99%), you can pay your medical debt faster. Some offices can help you get a 0% introductory rate for 6-18 months with this card.

Chase Freedom Unlimited

This card offers great rewards on some of the places you most often spend money, including drug stores.

U.S. Bank Visa Platinum Card

Need to consolidate medical debt into one place for a lower rate? This card might be right for you.

In addition to taking out a medical credit card, you do have other options for paying off medical expenses. Before you borrow money, it’s always a good idea to talk to your financial advisor. They can help you make an informed decision.

The first thing you should do when you have medical bills that you’re struggling to pay is to talk to your provider. Your doctor may be willing to accept smaller payments over a longer period, and they may even have discounts for paying cash.

While there are no guarantees that they’ll be able to work with you, it’s always worth checking before you take on another form of debt to pay your bills.

If you’re retired, have a limited income or meet other criteria, you may qualify for Medicaid assistance or other government or nonprofit organizations.

If you don’t have good credit, a medical loan (a type of personal loan) could be an option that works with your budget. These loans work for people on fixed incomes because the payments will be the same each month, making it easier to plan for the extra expense.

While it’s rarely the best option for paying off medical bills, you can withdraw money from your 401(k). For medical bills and other financial hardships, you can only withdraw the amount you need. You will pay taxes on those funds, but you don’t have to return the money to your account.

You can also take a loan from your 401(k) to pay medical expenses. Certain loans from a retirement account do not require you to pay taxes as long as you pay the money back on time, as stated in the loan agreement.

Learn more about the IRS’s rules regarding loans and withdrawals here.

There are several types of home equity loans that you can use to pay off medical bills. If you’re looking for a way to reduce medical expenses without taking on another loan (or credit card), borrowing against the equity you’ve built over time might be worth exploring.

A Home Equity Line of Credit (HELOC) is a type of loan that works much like a credit card. You can borrow up to 85% of your home’s value to pay for expenses over time.

There are some drawbacks to using a HELOC, though. It is a secured loan, meaning that if you can’t pay it back, you could lose your home. There are also variable interest rates, so you could end up paying more than you originally thought.

Nothing is stopping you from paying a medical bill with a normal credit card except for the interest you will pay on the bill. Getting a new card with a low introductory fee could help reduce some of those costs, especially if you find a card with a low or 0% intro rate.

In 2022, a significant percentage of adults (17%) with medical debt had to declare bankruptcy because they were unable to pay their bills. If you’ve recently found yourself with a large amount of medical debt, you’re probably concerned about how to take care of the additional expense.

If you’re retired, that extra bill could spell real trouble. To make sure that you have the means to cover emergency bills, take advantage of your Medicare plan and set up contingencies to cover everything else. Annuities and other retirement plans could provide you with the relief you need, so make sure to find out how you can access your funds when you require them.