Care Credit Card: 5 Essential Facts You Should Know
Managing medical expenses can be challenging, especially when they aren’t covered by insurance. To address this issue, Synchrony has introduced the CareCredit Card, a financing solution specifically designed for consumers facing healthcare costs.
Medical debt is a significant concern in the United States, with 17.8% of individuals having medical debt in collections as of June 2020, according to the Journal of the American Medical Association.
With the CareCredit Card, you’ll have more time to pay down your medical bills, although it’s important to note that high-interest rates may apply.
Here are five key things to know about the CareCredit Card:
- Limited Use for Health Care Purchases: The CareCredit Card is exclusively accepted by healthcare and wellness providers who have enrolled in the CareCredit program. While numerous providers and businesses accept the card, it’s possible that your preferred doctor may not.
If you plan to finance a medical expense, you can search for providers in your area that accept the CareCredit Card.
Enrolled providers include medical specialists, dentists, eye doctors, dermatologists, cosmetic surgeons, hospitals, surgical centers, medical imaging and lab facilities, medical equipment suppliers, pharmacies, fitness equipment providers, spas, and routine and emergency veterinary care.
- Deferred Interest Card Feature: The CareCredit Card operates as a deferred interest card, offering a no-interest promotional period. However, there’s a catch. If you don’t pay the balance in full by the end of the promotional period, you’ll be responsible for interest charges on the entire initial borrowed amount, not just the remaining balance.
The CareCredit Card provides short-term financing options with no interest for 6, 12, 18, or 24 months on purchases totaling $200 or more. Failing to repay the balance on time will result in a steep annual percentage rate (APR) of 26.99% (as of January 2023) being applied to the entire financed amount.
- Low-Interest Financing for Larger Expenses: For significant medical expenses, the CareCredit Card offers longer-term financing at lower interest rates, without any 0% introductory APR promotions. As of January 2023, purchases of $1,000 or more may qualify for the following APR options:
- 14.9% APR for 24 months.
- 15.9% APR for 36 months.
- 16.9% APR for 48 months.
Purchases of $2,500 or more could be eligible for a 60-month loan with a 17.9% APR. These financing options require fixed monthly payments until the balance is fully paid.
- Immediate Access to Your Account: When faced with a significant medical bill, timing is crucial. With the CareCredit Card, you can start using your account immediately after it gets approved, even if you haven’t received the physical card by mail yet.
This means you can apply for the card at the doctor’s office and utilize it to pay your bill right away.
- Exploring Alternatives for Medical Expense Payment: While the CareCredit Card is a viable option for covering significant medical expenses, it’s important to consider alternative choices based on your specific circumstances. Here are some options you may want to explore:
Lowering Costs and Ensuring Accuracy:
Before exploring payment methods, take steps to reduce expenses. Check if your health insurance plan offers discounts on specific procedures, healthcare products, or wellness programs.
Additionally, verify the accuracy of your medical bills to avoid unnecessary costs. If you discover errors, contact the provider to rectify them. You might also have the opportunity to negotiate a reduced cost directly with the healthcare provider.
Additional Payment Options: Once you have your final bill, consider these additional payment methods:
- Payment Plan: Your healthcare provider may offer a monthly payment plan without fees or interest. Contact them to discuss your eligibility for such arrangements.
- Credit Card with 0% APR Promotion: For planned medical expenses, using a credit card that offers a 0% interest rate on new purchases can provide you with time to pay off your balance.
Unlike the CareCredit Card, these credit cards won’t charge interest on the original borrowed amount if you fail to pay off the debt within the promotional period. Instead, you’ll only owe interest on the remaining balance.
- Balance Transfer Credit Card: If you have already charged a medical bill to a credit card, you can transfer the debt to a balance transfer credit card that offers a 0% interest rate. Qualifying for this option usually requires good or excellent credit, and you may be subject to a transfer fee.
However, once the 0% APR promotional period ends, you’ll only owe interest on the remaining balance, not the total amount originally transferred.
- Flexible Financing Options from an Existing Credit Card: Some major credit card issuers now provide the flexibility to convert your available credit line into an installment loan at a lower ongoing APR.
Alternatively, you may have the option to split an individual card transaction into predictable monthly payments.
- Personal Loan: Depending on your credit history and financial situation, you may qualify for better interest rates with a personal loan than what the CareCredit Card offers. Personal loans provide longer loan terms and potentially more favorable rates.
When it comes to managing medical expenses, the CareCredit Card is just one of several options available. By considering various strategies to reduce costs and exploring alternative payment methods, you can choose the approach that best suits your needs and financial situation.
The CareCredit Card serves as a valuable financing tool for medical expenses not covered by insurance. It provides more time to repay your bills, but it’s important to be aware of the potential high-interest rates.
By understanding the card’s limitations, deferred interest feature, low-interest options, and immediate accessibility, you can make informed decisions when utilizing the CareCredit Card.
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