A recent card on the scene is called a medical credit card. This kind of credit card is not something you get through the mail, but you may find that you are encouraged to sign up for it at the doctor’s office.
If you need quick medical services of some kind, or elective medical procedures that your insurer will not pay for, some doctors are now pushing their patients who really can’t afford to pay for those services to get a medical credit card. While it may sound good at the time, it seems that few doctors are revealing the whole story.
The Problem with Medical Credit Cards
The primary problem with medical credit cards is not that they are hard to get, but that they are too easy to get. It also seems that they may be given under some false pretenses, too, given to desperate patients without being told the important details. They are often presented as being a solution to an urgent need for credit.
The Source of Medical Credit Cards
Medical credit cards are not being offered by crooked moneylenders. Instead, they are being made available to medical and dental offices, as well as to veterinarian offices, by several of the large credit card companies and banks. Primarily, they are being supplied to patients for expenses not provided for by regular insurance coverage.
The Main Attraction of Medical Credit Cards
Besides being made to appear as the perfect solution to the patient’s need at the time, the patient is led to believe that they have “deferred interest” options on their payments. The primary condition to receiving this benefit is that they must pay the bill in full within a specified time period, which ranges from six months up to two years.
While a promise of deferred interest is often given, it seems that the payback period with no interest is deceiving. In reality the payback period is often much shorter and when this period is exceeded, the interest may jump up to 30 percent. This is leaving many people with limited incomes with large bills that they cannot pay.
Another attraction of some medical credit cards is that they do not require a credit check. They can be issued and approved quickly. They are based on the income that the household receives.
Another Problem with Medical Credit Cards
It does not take much to find yourself on the bad side of these credit cards. If you miss a payment, or are late with it, you can be back charged interest on the money you borrowed. Plus, you will be charged late fees. These measures seem to almost guarantee that many people will have problems repaying the debt in full without having some kind of payment problem somewhere along the way. Apparently, about 25 percent of people with the cards do run into problems.
Who Can Benefit from These Cards
There is little doubt that this kind of credit card will benefit some people. It would primarily be people that may not have other options, but they need to fully understand what is involved. They would also need to have a steady income that would enable them to meet the payments on a regular basis.
Generally, there seems to be a conflict of interest because the ones who will benefit – the doctors – are also the ones selling the cards. How convenient it would be if not all the terms were explained! The doctor would get paid regardless of what he or she said or did not say.
Alternatives to Medical Credit Cards
The first thing that you want to do if you might have a problem getting the required cash is to talk to the doctor or dentist about a pay plan. Many of them are willing to work out a payment plan of some kind, and they often will do it interest free. Make sure that you understand what the exact terms are before signing any documents. Unfortunately, some people are being encouraged to sign up for medical credit cards thinking that they are getting an in-house plan.
Another option to pay for treatments not included in your healthcare policy is to use a low interest credit card. If necessary, this can also enable you get the credit you need, and to spread out the payments, but you do want to remember that any credit card can increase its interest rate if you miss payments or make late payments.
Caution needs to be exercised when you sign a medical credit cards plan. Be sure to understand all the terms; but better yet, you may want to quickly find alternative solutions.
Laura Ginn appreciates that there are many different kinds of credit cards available to apply for. To find out more about the range of cards that are available check out the free advice and information on Myfin.us.
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