Review of CareCredit and Major Medical Credit Cards

Woman using credit card for medical purposes
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If you’re looking for financing for medical expenses, your doctor or hospital may suggest you use a medical credit card. This is a type of credit card that medical service providers offer to patients as a way to finance medical services that you’d otherwise have to pay for out of pocket. Some even allow you to pay for veterinary services. These credit cards aren’t co-branded with a major credit card processing network like Visa or MasterCard, so you can’t use them to make purchases anywhere else.

When you’re faced with a medical expense that you really can’t afford—whether it’s large or small—a medical credit card may sound like the perfect solution to your problem. Many of them offer a no interest promotion that allows you to make payments without any interest for a certain amount of time. However, as with any financial decision, you should carefully consider the fine print, and how the purchase fits into your budget, before you sign on the dotted line.

Which Medical Credit Cards Are Available?

These are a few of the most common medical credit cards. It’s not a definitive list. Your medical services provider may offer another credit card or may even offer their own in-office financing plan.

CareCredit

CreditCredit is one of the most well known medical credit cards. The credit card offers no-interest promotional periods of 6, 12, 18, and 24 months as long as you’re services are more than $200.

The interest rate is 26.99 percent.

CareCredit also offers reduced interest rates for certain balance. If you charge $1,000 or more, the interest rate is 14.90 percent for 24, 36, or 48 months. Or, for charges of $2,500 or more, the interest rate is 16.90 percent for 60 months. This gives you more time to pay off your balance, but also increases the amount of interest you’ll end up paying.

Wells Fargo Health Advantage

Wells Fargo Health Advantage offers a no interest promotion that lasts between 6 and 18 months, depending on the amount you charge. After the promotion, an interest rate of 12.99 percent will be applied retroactively to any balance you have remaining. You’ll also be charged interest each month going forward until your balance is paid off. Wells Fargo offers their medical credit card for a narrower range of services.

AccessOne MedCard

The AccessOne MedCard another medical credit card offered, but its terms vary by healthcare provider. If you’re considering this card, make sure you read the terms very carefully to learn the about any interest promotion, the amount you must charge to receive the promotion, the promotional period, and the interest rate that applies after the promotion ends.

How Medical Credit Cards Work

As with many medical credit cards, the no-interest promotion requires you to pay the full balance by the end of the promotional period to actually avoid paying interest. Otherwise, if even you have any balance left after the promotional period, you’ll be charged interest retroactively with interest from day one. So it’s not really a no-interest promotion that you’re signing up for—it’s actually deferred interest, which is different.

CareCredit’s website does a good job of laying out the interest rates and even includes an interest calculator so you can enter your balance and payment information to figure out whether the card may work for you.

Because medical credit cards actually offer a deferred interest promotion and not a true 0 percent interest promotional period, it's important to assess your budget and be sure you can afford to pay off the balance during the promotional period. If you can't pay enough each month to gain the benefit of the deferred interest, you should consider other, less expensive financing options.

Even though you have to make a higher monthly payment to benefit from the interest promotion, your credit card issuer will only require you to make minimum payments toward your balance. It’s up to you to know what payment amount is necessary to take full advantage of the promotion.

Using a regular credit card with a promotional rate or a low interest rate is generally better than using a medical credit card. While the promotional period may not be as long as that offered with a regular credit card, you won’t be hit with interest retroactively if you don’t pay off the balance. The post-promotional interest rate will also be lower than it would with a medical credit card.

Saving up, taking out a home equity loan, or borrowing a personal loan are other options for financing your medical expenses. In some cases you may be able to take a penalty-free withdrawal from your retirement account to fund your medical expenses. Some people have even taken to crowdfunding as a way to pay for their medical bills. Crowdfunding involves raising a large amount of money by taking small donations from hundreds, even thousands of donors.

How to Apply for a Medical Credit Card

You’ll typically apply for the medical credit card at the doctor’s office. CareCredit and Wells Fargo allow you to apply for their medical credit cards online and find out whether you’ve been approved. It’s important to read and understand the terms before you apply for the credit card. Ask the service provider to provide you with this information so you can consider it before applying. Don’t apply for the credit card without knowing the terms.

Applying for a medical credit card is like applying for a regular credit card. You’ll provide your personal information and your monthly or annual income. The credit card issuer will perform a credit check to determine whether you qualify for the credit card and the credit limit you’re approved for.

Because your credit history is taken into consideration—after all, you’re asking for the ability to pay back a balance over time—your application can be denied. If your medical credit card application is denied, the credit card issuer will send a letter letting you know the reasons your application was turned down. Unfortunately, this also means you’ll have to find another way to finance your medical services.

The account and your credit history will be included on your credit report so it’s important to make your monthly payments on time. Late payments will go on your credit report and affect your credit score.