SAN DIEGO – Credit cards and medical loans promise to ease the burden of medical debt, but Consumer Reports warns you to think twice before paying this way.
If you are having trouble paying your medical bills, it may be tempting to apply for a medical credit card or medical loan offered by your medical provider. But be careful, they have serious consequences.
According to Luz Plasencia, spokesperson for Consumer Reports: “these options can have high interest rates, high payment penalties and damage your credit.”
CareCredit is the largest medical credit card company and is a subsidiary of Synchrony Financial. A Synchrony spokesperson said that “CareCredit’s convenient and transparent financing options make health and wellness care more affordable and can be used to pay for a wide range of health and wellness items.”
But, according to the Consumer Financial Protection Bureau, the average medical credit card carries a whopping 27% interest rate, much higher than the typical 16% for a general-purpose credit card.
One of the main reasons the CFPB warned is that “our research indicates that, in many cases, patients who use these products end up worse off.”
Instead of signing up for a credit card or medical loan, ask your medical provider if they directly offer no- or low-interest payment plans. If that doesn’t work, consider other options.
“If you have good credit, you can consider a personal loan from your bank or credit union, where interest rates start around 10%,” Plasencia said.
Never offer your credit card when receiving medical care in an emergency room. If you have health insurance, ask to have the bill sent to your insurance company. If you don’t have insurance, ask for it to be mailed to you so you can decide how to pay for it or negotiate it in a calmer environment. And if you end up with a hospital bill you can’t pay, always ask if there is a charitable program you can apply for help with. You can find out how to apply at your specific hospital at DollarFor.org.
2023-12-13 23:00:04
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