Medical Credit Cards: Should You Use Them?

When exploring payment options, many patients ask, “What is a medical credit card?” Medical credit cards are special-purpose credit cards for paying medical expenses. These cards offer short-term financing by third-party lenders and can often be used at a variety of medical providers

What medical cards cover

Medical credit cards don’t always cover all medical services or procedures. Some may only cover in-hospital services and non-elective surgeries, while others are specific to cosmetic and elective procedures. Unless your medical credit card has a Visa, Mastercard or American Express logo, it is only accepted by participating medical providers and hospitals.

Applying for a medical credit card

You generally apply for a medical credit card where you receive healthcare (like at your doctor’s office or a hospital). Many medical card providers allow customers to apply online and then use the card to pay for services at participating medical offices and providers. These cards typically require an application and may sometimes include a credit check. You can be denied if you don’t meet the credit standards, which depend on each issuer.

If you’re approved, check to see if the card information and payment history will be reported to one of the three major credit bureaus. Not all will; some will report only if you become delinquent and your account is sent to collections.

Sometimes the best credit card for medical expenses isn’t a credit card. Medical loans are another way to finance medical bills, treatments and other procedures. While a medical credit card can be used repeatedly at participating providers, its open-ended nature can lead to overwhelming debt.

Patients generally take out medical loans ahead of time, and the loan is only authorized to cover a single procedure or other medical expense. The borrower knows the payment terms upfront, and the debt will be paid off at the end of the loan term.

If the patient needs to pay for another procedure, they must take out another loan. Medical loans are not as common now that doctors’ offices, treatment centers, hospitals and other providers often provide no-interest payment plans in-house instead of outsourcing the financing to a third-party lender.

• Deferred interest

  Medical credit cards sometimes offer deferred interest, which is similar to a 0% APR credit card, but there’s a catch. Not all transactions are eligible for promotional financing, and you may be charged interest if you do not pay your balance in full before the end of the promotional period. If not, the card issuer charges interest retroactively from the purchase date. That means you could pay off 99% of your bill and still have to pay all the interest on the full balance from the time of purchase.

• Higher medical costs

  If your doctor’s office knows you’re paying with a medical credit card or similar financial product, they might push you to get more expensive or additional procedures. The Consumer Financial Protection Bureau reports that some financial institutions encourage using these products as a way to upsell customers on pricier services that they wouldn’t otherwise agree to.

• Missing out on financial assistance

  Depending on your income, you may qualify for financial assistance. Your healthcare provider might not tell you about financial assistance if they have the opportunity to sign you up for a medical credit card instead.

• Costly bills

  Outside of promotions, medical credit cards tend to have high APRs. You may already have access to financing options — like loans or regular credit cards — that would cost less in the long run.

• Limited selection of providers

  Unlike a traditional credit card, most medical credit cards can only be used at participating providers. If you need to finance your treatments, you may be stuck with a limited selection of providers that may charge more or provide a lower standard of care than if you could choose another medical provider.

Please fact-check and update as needed for accuracy. Please mention other major credit cards if applicable.

Medical credit cards aren’t as common as other types of credit cards. There were three primary medical credit card options – the CareCredit® credit card, the Wells Fargo Health Advantage® Credit Card and the Comenity Alphaeon Credit Card. However, the Wells Fargo Health Advantage® Credit Card no longer accepts new applications, and existing customer accounts will close in September 2025.

Keep in mind that these cards may only be offered at select approved providers or work for specific medical procedures and expenses. Here’s a look at how these medical credit cards compare.

Do you have an existing credit card with enough available credit and a low interest rate? Consider using that card to pay for medical expenses, then pay it off as soon as possible to minimize interest charges.

If you have good credit, you might also consider moving the balance to one with a 0% APR on balance transfers for a limited time (usually 12 to 18 months). You could also open a regular credit card with an intro 0% APR for purchases and use that for the medical bills directly. Unlike medical credit cards, interest won’t accrue during the promotional period if you can’t pay off the entire balance before the intro period ends.

Here are some suggestions if you’re paying medical bills with a credit card:

• Keep your balance below 30% of your limit to avoid hurting your credit score.
• If you don’t have a promotional period, make substantial monthly payments to quickly pay off the balance and minimize interest charges.
• Make multiple payments throughout the month to reduce the amount of interest charged by your credit card.
• Rewards earned from your credit card may offset interest charges and help pay off your balance more quickly.
• Don’t use that card for other purchases until you’ve fully paid off your medical debt.

You can earn valuable cash back, miles or points when using a rewards credit card for medical expenses. These charges can also help you meet a new card’s minimum spending requirement.

There are many types of rewards credit cards, including some offering bonuses at places where you might make medical or health purchases, like drugstores or grocery stores.

The new card may include a 0% introductory APR on purchases for up to 21 months, depending on which one you choose. Intro offers are helpful when you have large medical expenses or purchases that you need extra time paying off without costly interest charges.

Below are some of the best credit cards for medical expenses.

Negotiating your medical bills may reduce the amount owed. The medical provider may also offer payment plans that avoid interest charges. Medical providers are often willing to work with you on your bill, especially if you’re a regular patient. They would rather get paid than incur the extra cost of sending bills to collections.

What you can do before your medical or healthcare visit

• Contact your insurance company about the provider and type of care you’ll receive to ensure your visit is covered.
• Request an estimate from the provider, especially if it’s a more expensive procedure or care.
• Find out if there’s any payment assistance you’re legally obligated to receive.
• Use online tools, like the Medicare Procedure Price Lookup or the Healthcare Bluebook, to research nearby doctors who may offer better pricing for the same procedure.

What you can do after your medical or healthcare visit

• Request an itemized bill from your provider and review all the services they are billing you for. Billing advocates and health professionals have estimated that up to 80% of bills have inaccuracies or fraud, so getting an itemized bill may lower the amount you have to pay. On top of that, your insurance company could deny your claim for a covered procedure if it were incorrectly coded.
• Contact the provider’s billing department to negotiate your bill. Be upfront about your current circumstances and how much you can afford to pay. You are within your rights to ask your provider to lower your bill, although they are not required to do so.
• Ask if there are any available no-interest payment plans.
• Find out if there is any available financial assistance for your medical bills.

If you’re having difficulty paying your medical bills, contact your provider before using credit cards. You may lose the ability to negotiate your bill once you put the charge on a card.

Medical bills do not affect your credit score if you pay them on time. However, your credit score could be hurt if your unpaid medical debt is sent to a collection agency.

Even if your medical debt is sent to collections, you have time to act before it affects your credit. The three major credit bureaus offer some leniency regarding medical debt. Credit bureaus provide a 365-day window because it may take extra time for your insurance company to process and pay the bill. This extra time also allows you to negotiate with your provider and resolve collections for medical debt before there is any impact on your credit report.

Beginning March 31, 2023, medical collections under $500 no longer appear on consumer credit reports. This benefit does not apply to medical expenses paid with a credit card.

If you have unpaid medical bills in collections for longer than a year, they will show up on your credit report, potentially causing your FICO credit score to drop.

VantageScore has taken further steps to protect consumers. As of January 2023, it no longer includes medical debt or medical collections in its calculations. Even if the debt may not impact your credit score, it is still a good idea to take care of your bills as swiftly as possible to avoid potential issues.

• Payment assistance

  If you’re unable to pay your medical bills, getting a medical credit card shouldn’t be your first move. Instead, talk with your doctor, hospital or medical provider about payment assistance. Many hospitals, doctor’s groups, government entities and community organizations have charitable funds that can help with payments.

  If you can make small monthly payments, consider setting up an extended payment plan with your medical provider. Typically, these payment plans charge little to no interest. The organization may also offer monthly payments on a sliding scale based on your income.

• Loans for medical bills

  Some companies specialize in medical loans, but all-purpose personal loans from your bank can also be used to pay medical bills. If you’re worried that your credit score might not be high enough, you may want to look into medical loans for bad credit and other loans for bad credit.

  Unsecured loans typically offer fixed interest rates starting at 6%. Generally, borrowers with higher credit scores and shorter repayment terms receive the lowest interest rates. The installment payments make paying back the loan easier — as long as you stick to the schedule — but you still have to pay interest on the amount you borrowed, making the overall cost of your medical procedure more expensive.

• Home equity

  With home values rising, many homeowners have home equity that they can tap to pay for unexpected expenses like medical care. While home values may be near all-time highs, using your home’s equity may not be a wise choice.

  In many states, a homeowner exemption protects a large portion of your equity from creditors. This means that creditors cannot force you to use your home equity to pay their bills.

  If you decide to use your equity for your medical care, there are several options to choose from. Financing options include a home equity loan, a home equity line of credit (HELOC), or cash-out refinance. Mortgages and home equity loans offer attractive interest rates that are typically much lower than credit cards, personal loans and other types of financing.

  Having good credit (670 FICO Score and above) and a reliable source of income often leads to the best interest rates. These loans often come with closing costs, which can further increase the cost of your medical care.

• Retirement savings

  After their home, retirement savings is often one of the largest assets a person owns. Some investors are tempted to access their retirement accounts to cover their medical bills.

  Investors with a 401(k) or traditional and Roth IRAs can also make early withdrawals without the 10% penalty. The penalty is waived when paying for unreimbursed medical expenses that exceed 7.5% of your adjusted gross income. Unfortunately, you won’t be able to replace these withdrawals should your income increase in the future.

  Some 401(k) plans allow participants to borrow money from their savings instead of making a withdrawal. You can use this money for medical bills and other expenses. Until you repay the loan, you’ll miss out on investment performance that could impact your retirement. Additionally, all payroll contributions go toward paying the loan down instead of investing according to your allocation.

  Keep in mind that withdrawals may be subject to income tax, which could make your financial situation worse. If there is a balance on your 401(k) loan when you leave your job, the balance will be treated as a withdrawal unless you can repay it quickly. That distribution could be subject to income taxes and a 10% penalty.

• Other options

  If you have some advance notice for pricey medical procedures, increase pre-tax contributions to your flexible savings account (FSA) or health savings account (HSA) to help pay for the costs.

  Consider changing insurance coverage during annual enrollment or if you have a qualifying event. By selecting a different type of insurance plan, you may be able to reduce your out-of-pocket expense through an HMO over a PPO or high-deductible healthcare plan (HPHP).

   Tip:

  Ask your medical provider for an itemized bill. This allows you to identify duplicate or erroneous billing, negotiate inflated prices and cross-check prices against other providers.