It’s no secret that healthcare in the U.S. is expensive. A 2016 Kaiser Family Foundation survey found that 26% of respondents of adults 18 to 64 had someone in their household who had trouble paying a medical bill. Of those, 31% reported that the total they are struggling to pay is $5,000 or more, while 13% have bills of $10,000 or more. Trips to the emergency room, hospitalization, dental care, and diagnostic tests make up the largest share of expenses owed.
Given these numbers, it’s no surprise that 61% of those struggling to pay medical bills have made late payments, and 56% have missed payments altogether. This has resulted in collection agencies stepping in for medical providers to facilitate payment of these debts.
Once you start getting notices, calls, or even collection entries on your credit report, using a credit card to quickly pay off the total owed becomes a tempting solution. Though not the ideal way to manage medical debt, paying off a bill with a credit card can enable you to avoid negative impacts on your credit — if you do it right. Here is a look at which credit cards are best for paying medical bills and how you can use them to your advantage.
- Is paying your medical bills with a credit card a good idea?
- What’s the best credit card for medical bills?
- Why we chose these cards
- The final word on the best credit cards for medical bills
Is paying your medical bills with a credit card a good idea?
Paying medical bills with a credit card is generally only a good idea if you can pay off the balance within the card’s grace period or if the card you’re applying for has a 0% introductory APR. Since credit card interest is often high — averaging around 16%, but often as high as 29% for those with less-than-perfect credit — adding a large amount of debt to the balance can result in paying interest many times greater than the original bill.
For example, if you use your card with a 16% APR to pay a $1,500 medical bill, and then only make a minimum payment that pays the month’s interest and 1% of the balance, you would have a low, seemingly manageable payment of $50 a month. However, it will take you 30 years an additional $15,514.37 of interest to pay off this debt, provided you only make the minimum payments.
Likely the best option for paying off medical debt is to try and negotiate a payment plan directly with the provider. Most companies are willing to work with you and allow you to pay your bill over time and without interest. If this doesn’t pan out for you, a personal loan may be another good option.
With a personal loan, you set up a fixed period of time to pay off your debt, usually with a single monthly payment that doesn’t change throughout the life of the loan. Simple interest is charged, which means you’ll pay whatever the APR is times the amount you’re borrowing. This is rolled into the amount of the loan, and your monthly payment is calculated based on that balance. Personal loan interest rates are often much lower than those of credit cards.
If you were to take out a personal loan for the $1,500 bill mentioned earlier with a 10% APR and a repayment term of three years, your payment calculations would look something like this:
- 1500 x .10 = $150 total interest
- 1500 + 150 = $1,650 total amount to pay back
- 1650 / 36 = $45.83 monthly payment
What’s the best credit card for medical bills?
When looking for a credit card to pay medical bills, you’ll want to search for ones that minimize additional expenses. 0% introductory APR cards are a good place to start, as these will give you a period of time where you can pay down the balance quickly without adding interest.
Cards with no annual fees are also good to explore, as are cashback cards and rewards cards with welcome offers for spending a certain amount within the first three months. Though the interest rates on these cards will add to the total you end up paying for the bill, you’ll save yourself an additional fee or build a bank of rewards credits that can be used to pay for expenses in the future.
Another consideration is whether you plan on using a card to pay for current or future medical bills. If you know a large expense will be coming up, you want to time your credit card application so that the charge will fall into the 0% introductory APR period. This way, you’ll have as many months as possible to pay down the balance before interest kicks in. In the case of rewards cards, you’ll want to get the card so that the expense is charged within 90 days of opening the new account.
Your financial situation is probably the most important thing to consider before choosing a card for medical expenses. What does your monthly budget look like? How much can you afford to pay toward this bill once it’s on your card? How long do you have to pay it off before interest begins accruing? Is it possible to pay it off before this time, and if so, how much will you have to pay monthly to make this happen? The answers to these questions will help you choose a card that’s right for your situation and build a strategy for paying it off.
One thing you want to make sure of is that you’re not putting so much on a credit card that monthly payments will be unmanageable. Missed and late payments will have a negative impact on your credit.
Here are five cards that we think are worth considering if you’re planning on paying off medical bills with a credit card.
|Card||Annual fee||Introductory APR||Recommended credit score|
|Wells Fargo Platinum Visa Card||$0||0% APR for 18 months||Excellent, Good|
|Chase Freedom Unlimited Card||$0||0% APR for 15 months||Excellent, Good|
|Capital One® Quicksilver® Cash Rewards Card||$0||0% APR for 15 months||Excellent|
|Discover It Cashback||$0||0% APR for 14 months||Excellent, Good, Fair|
|Citi Simplicity Mastercard||$0||0% for 12 months||Excellent, Good|
Wells Fargo Platinum Card
The Wells Fargo Platinum Card is marketed as the “low interest and APR credit card.” It offers a 0% introductory APR on purchases for 18 months, as well as a $0 annual fee.
The long intro APR makes this card a great choice for larger medical bills, as you’ll have a year and a half to pay it down before any interest is charged. Also, if you know you’ll be having to pay for several medical expenses over the course of a few months or a year, you could use this card to pay upfront and then budget out how you will pay down the balance within the intro period.
Chase Freedom Unlimited Card
The Chase Freedom Unlimited card has a lot going for it, not the least of which is a 0% introductory APR for 15 months and a $0 annual fee. The other thing that makes this card stand out is the unlimited 1.5% cash back on all purchases.
That means if you charge a $2,500 doctor’s bill on this card, you’ll get a credit on your statement for $37.50 — free money that will reduce your balance or reimburse your payment. If you make that charge within the first three months of opening your account, you’ll also get a $200 bonus (need to spend at least $500 within 90 days). That’s $237.50 less that you have to pay for that bill!
Capital One Quicksilver Cash Rewards Card
This card is very similar to our previous pick, with 0% APR for 15 months and unlimited 1.5% cash back rewards on every purchase, every day. Capital One Quicksilver Cash Rewards gives you an early spend bonus — new cardmembers can earn a $150 cash back bonus after spending $500 in the first 3 months of opening an account. That’s a fantastic reward if you have a medical bill that’s only a few hundred dollars. Add in the cash back percentage and you could end up with much of your bill paid for you!
You do need excellent credit to qualify for this card. Since your APR is based on creditworthiness, you stand a decent chance at getting in the lower percentages with a high credit score and good payment history.
Discover it Cash Back
The Discover it Cash Back card’s 0% APR is only for 14 months, but cardmembers can also earn up to 5% cash back at gas stations, grocery stores, restaurants, Amazon.com, and more (up to the quarterly maximum), along with 1% cash back on all purchases. Plus, you automatically get an unlimited dollar-for-dollar match of any cash back you've earned at the end of your first year.
This is a great perk if you use the card to pay for a medical bill the first year. You’ll also get more cost savings with other purchases that fall within Discover’s 5% quarterly categories. Overall, this card gets a lot of bang for the bucks you charge.
Citi Simplicity Mastercard
At only 12 months, the Citi Simplicity Mastercard has the shortest 0% introductory APR for purchases. But it’s still a good option, as it offers a $0 annual fee and no late fees, which gives you some peace of mind that you won’t be charged more if you’re a little late making a payment.
You also may want to consider this card if you have a balance on another card that you used to pay for past medical bills. Citi Simplicity offers 0% on balance transfers for 21 months, which gives you nearly two years to pay down the balance without adding more interest.
Why we chose these cards
These specific cards were chosen because we think they offer the most value when you’re making significant charges. They all have long 0% APR introductory periods and no annual fees, both of which are ideal for financing medical expenses and keeping overall costs down.
Many also have welcome offers that will actually lower the cost of the bills you’re paying or have cashback rewards that can lower the amount you pay on your medical bills overall.
The final word on the best credit cards for medical bills
Make sure to carefully consider the costs and benefits of a credit card before you apply and choose one that fits your specific needs and situation. Once you’ve been approved, remember that spending wisely will help you keep down overall costs associated with financing medical bills through revolving credit. Always have a plan for paying off the expenses you charge and stick with the budget you’ve created for accomplishing this. Then you’ll be in good shape for keeping your credit and financial life healthy.