The many dangers of paying medical bills with a credit card |
By David Pilley on September 18, 2011
.jpg.aspx?width=75&height=75) There’s always a danger in paying with plastic. You don’t have the money now, and you must make sure you have the money when it is due. You can’t be 100% positive that you’ll have the funds, so plastic is risky. Some people who don’t have insurance end up paying their medical bills with credit cards. If you can handle a medical bill with plastic, you are in a tiny minority, as this is not a suggested way to pay. Not only are a credit card’s interest rate and late fees dangerous, you may be more susceptible to identity theft. Let’s go more into detail why you should not pay a medical bill with a credit card.
Minimum monthly payment. This is something you will find with every credit card. Creditors know you can’t pay the entire amount in one lump-sum, so they stretch it out to the max. If you pay the minimum every month on your medical bill, it could be over the course of several years. Creditors will then make more money off of you because of the interest rate. And, because medical procedures can be a fortune (some major surgeries can be in excess of $100,000), paying the minimum each month may be just like paying on another mortgage!
Interest rate. Again, creditors make their money not from you paying back the loan, but from you paying interest on the loan. Some creditors may tempt you into purchasing a credit card by offering an introductory period of little or no interest. After that period, however, the interest may take gradual steps or it may jump directly to the stated rate. Interest rates on a credit card are almost always above 10%, while a payment plan directly with the hospital will certainly have a lower rate.
Identity theft. This may be the most dangerous aspect of paying with a credit card. Especially if you use auto-pay, linking a credit card with your bank account, your information will be available to a lot of people. Information leaking from a credit card company happens much more often than information leaking from a hospital. Doctors, anesthesiologists, nurses, et al. have a strict standard of upholding doctor-patient confidentiality, and your personal information can be released only with your consent. While a doctor may have a long list of patients, he/she has a better relationship with you than a credit card company ever will.
Paying medical bills with a credit card is a dangerous route. It is recommended that you get a payment plan from the hospital itself rather than looking for a new line of credit. Your payments may be more manageable, your interest rate will be lower, and you will be at much less risk of having your personal and financial information stolen.
Note: The US Library of Medicine has a website where you can look at costs of medical procedures in numerous states. You can go to http://www.nlm.nih.gov/services/procedcosts.html to see for yourself.
There are organizations that can help with medical bills if you find you are unable to pay.
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