The Use of Medical Credit Cards

By Hillary Eames
Wednesday, March 11, 2020

Practices may benefit from accepting medical credit cards, but patients who use them can experience drawbacks.

Medical credit cards will often pay the patient’s bill up front, assuming all of the risk, which can help medical facilities spend less time on billing and collecting. Patients may use such cards, for instance, when their insurance covers an initial medical or dental exam but not the recommended treatments.

Patients who use these cards make monthly payments, and if the medical bill is paid within a promotional, misleadingly named “0% interest” period, they pay no interest. This option can benefit those who require care but cannot afford it, while still allowing facilities to receive payment at the time of service. One medical credit card business stated their service helps practices receive payment in as little as two business days.

However, these cards are not 0% interest, as some credit card offers are. Instead, interest begins accruing the day the card is used for the purchase. If the patient does not pay the bill within the 0% interest promotional period, he or she must pay the interest that has accrued retroactively since the purchase date.

Several companies set these interest rates very high, with one commonly used medical credit card company charging a 26.99% rate. If a patient makes only the minimum payment during the interest-free time frame, he or she may end up paying more in interest than the amount of the original bill. While medical credit cards have the potential to benefit the facility, for some patients, they merely defer the financial burden — and may make it worse.