Medical credit cards can cost you big

Tuesday, August 5th, 2014

The high cost of medical services – dentistry in particular – is apparently gearing up the growth of the medical credit cards market. Today more Americans are using medical credit cards to finance medical procedures.

These cards help consumers to pay for medical services that are not covered by health insurance even though they charge interest rates running from 10% to nearly 30%. And these medical credit cards are great deal for the dentists, doctors, and other medical professionals that offer them. The credit card issuers pay the doctors for the cost of the service.

Unfortunately, most deals provided to consumers are not attractive. Consumers may end up paying for procedures they haven’t received yet (or even never received) and facing retroactive interest charges.

Nearly all credit cards with deferred interest have two catches that can force consumers to pay huge retroactive interest charges. The first catch is that if you have a balance remaining at the end of the interest-free period, you’ll pay interest on the entire amount that was financed from the first day of the loan.

The second catch is that if you pay less or will be late in the repayment process, the no-interest deal will be rescinded retroactively and you will pay interest on the entire amount back to the first day the loan was funded.

But the worst possible situation is when you are charged for the entire cost of the procedure long before the procedure is complete. Thus, you are paying the interest on charges that should appear significantly later.

Consumers should consider all possible payment options before agreeing to take out a medical credit card. Many hospitals and doctors may agree to set up informal monthly payment loans, allowing you to pay over time without a credit agreement. It is also can be preferable to finance a medical procedure on a low-interest non-medical credit card. You can find plenty 0% interest introductory period credit cards issued by major banks.

If you need to finance an uninsured medical procedure you can’t afford, make sure you shop around. Avoid abusive credit agreements and don’t make mistakes with a medical credit card.

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