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Ask the Health Insurance Expert
My chiropractor offered me a credit card to pay for visits my insurance doesn't cover. Should I accept it?
JP Morgan Chase, Citigroup and GE Money are among big financial institutions that market health care credit cards and credit lines to consumers to pay for medical expenses not covered by health insurance. The cards are made available through dentists, chiropractors and other health care providers. By getting their patients to sign up for the credit cards, the providers get paid within a few days and don't have to worry about setting up finance plans or risk having to send unpaid accounts to collections.
But is a medical credit card right for you?
Consumer advocates advise caution.
Last year, New York Attorney General Andrew Cuomo investigated the medical credit card industry after his office received numerous complaints. Some consumers said they were charged upfront for services they never received and then had difficulty obtaining refunds. Others were caught by surprise when the zero percent promotional interest periods ended and, if they had not paid off their entire balance, were charged 25 percent interest retroactively.
Read the terms and conditions of any credit card carefully to make sure you understand the rules, including how to maintain the promotional interest rate. Don't agree to charge anything on a card until you've had a chance to review the medical bill. And consider other options for paying for the service. Ask your provider if you can set up a payment plan instead.
A medical credit card may be a good deal if you understand how the card works and can pay off the entire bill before the promotional interest rate expires. But it can lead to debt problems if you're already struggling to make ends meet, and it could hurt your credit rating. Often the credit limit on a medical credit card is the amount the provider charges for the service, so the card is maxed out from day one. A factor in credit scores is the percentage of available credit you use. Experts generally advise to use less than 30 percent of your available credit.
For more, read Take 20 percent APR and call me in the morning.