IF you are like most people, you have probably used a credit card to pay some of your medical bills. With rising health costs and gaps in insurance coverage, it's almost unavoidable.
Patients pay about $45 billion worth of health care costs with plastic, according to a McKinsey report. By 2015, it could more than triple to an estimated $150 billion. And big finance companies and medical providers have taken note.
In US, GE Money, Citibank and JPMorgan Chase have issued medical credit cards or lines of credit intended to be used specifically for elective health care expenses not covered by insurance, including certain dental procedures, some cosmetic surgery and even veterinary care.
The issuers market these cards not so much to consumers but to doctors, who in turn offer them to patients as a payment option.
Patients like medical credit cards because payments can be spread out over many months and the cards can be used at multiple providers.
But critics and patient advocates claim that misleading marketing tactics can lead to serious headaches for consumers. More commonly, critics say, patients may be led to assume that their providers are simply offering payment plans, not a credit card with all the potential fees, interest rate increases and the impact on credit scores that can entail.
Ironically, these cards may be best suited to people who already have financial resources, a consumer advocacy group. But it's usually people with limited resources who sign up.
Whether you view these cards as a convenient way to pay medical expenses or just another way for credit card companies to collect interest and fees.
Here are some things to consider if your provider approaches you:
Ask for alternatives: I encourage people to negotiate and get an extended payment plan directly from that office with a monthly payment and time period you are comfortable with.
If you choose to sign up, be sure you've read through the terms carefully and that you understand the interest rates and late payment fees.
Dodge the hard sell: Some patients report feeling pressured by their clinics to use the card to pay for procedures or treatments they may not need or can't afford.
That's no surprise, since these cards are intended, at least in part, to drive more business to dentists, surgeons or doctors. Take a day or two to read through materials thoroughly and research your options.
Beware of teaser rates: Almost all medical credit cards claim zero per cent financing. This is what makes them attractive: you can spread out your payments and pay no interest.
But it is important to read the fine print. As with most credit cards marketed this way, the zero per cent rate lasts only for an initial promotional period, usually from six to 24 months.
Pay as you go: If you change providers midway through, it can be difficult and time consuming to get a refund. If your treatment will take more than one visit, make sure your provider is billing you by the visit, not lump sum.
