Medical costs can be a big financial burden and a significant difficulty. As a result, a number of well-known lenders and health care firms, including GE Capital, JPMorgan Chase, Citigroup, Capital One, UnitedHealth Group, and Humana, provide credit cards to aid with the high costs of health care. Even if several of these companies dropped out of the program, consumers can still get revolving credit lines to meet health-care bills.
CareCredit, a part of Synchrony Financial, is one of these credit lines (SYF). It has arrangements with a wide range of health care providers to accept its card as payment as one of the major providers of private-label credit cards in the United States. Over 250,000 health care providers in the United States presently accept the card.
These cards can be a simple way to pay your medical bills, but they come with a high cost. If you do not pay off your balance in full by the conclusion of your first promotional term, using CareCredit can cost you money.
Key Conclusions :
- CareCredit by Synchrony has relationships with a wide range of health care providers who accept its credit card.
- Synchrony is a major provider of private-label credit cards in the United States.
- The card covers standard medical insurance copayments on covered services as well as elective medical procedures that are not covered by traditional insurance policies.
- CareCredit does not charge a yearly fee.
- Consumers should bear in mind that if you can't pay back your debt within the promotional period, CareCredit can be a costly way to pay for medical expenditures.
CareCredit's Workings
The CareCredit card functions somewhat similarly to a standard credit card. Only the fact that it can only be used to pay regular medical insurance copayments for covered treatments makes it different. Additionally, elective medical procedures not covered by conventional insurance policies may be paid for using the card. The card can be used for a variety of medical procedures and wellness services, including eye care, cosmetic surgery, dermatology services, dental care, and hearing care.
In addition to surgeons, dentists, and medical offices, there are also clinics for hearing and vision care, hair restoration, and even veterinary services. Owners of CareCredit cards can use the website to search for nearby businesses that accept the card by entering their zip code.
Financing Options
Customers who use the CareCredit card are qualified to take advantage of short-term financing deals that let them spread their payments over six, twelve, eighteen, or twenty-four months. As long as customers spend at least $200 and pay the entire amount within the predetermined time period, there are no additional interest fees. For minimum purchases of $2,500, extended terms of up to 60 months are also available, with interest rates as low as 17.9%.
But keep in mind that some cards have substantially higher indicated annual percentage rates (APRs), at 26.99%.
Additionally, 2LT provides longer-term medical financing for terms of 24, 36, 48, or 60 months with APRs ranging from 14.9% to 17.9%. If you are late, late fines per statement period run from $15 to $39.
Application for CareCredit
By utilizing its online service at CareCredit. You can pre-qualify for CareCredit.
If you'd rather not apply online, call 1-800-677-0718, the company's toll-free number, to do so. You can apply via a live agent or an automated system anytime between 9 a.m. and 9 p.m. ET, Monday through Friday.
More than 250,000 healthcare facilities and a few retail establishments that accept CareCredit also allow you to apply in person. No applications can be submitted to CareCredit by fax or email.
Requirements for CareCredit
Anyone can use CareCredit to see if they are eligible for a card. Your credit score won't be impacted by this choice. You must submit the following details to Synchrony in order to apply:
- Name
- Address
- Date of birth
- Social Security number (SSN) or individual taxpayer identification number (ITIN)
- Net income
- Housing Information
Limits for CareCredit
Your credit history affects the credit limit on your CareCredit card. These cards have a $200 minimum purchase requirement and a $25,000 credit limit for those with excellent credit.
Because CareCredit cards are so simple to obtain and have high credit limits, they may be a viable option for people with bad credit histories who need to pay for medical expenses. But if you can't make your payments on time, CareCredit cards might cost you a lot of money.
CareCredit Risks
The emphasis of CareCredit's marketing messages is on giving its clients access to affordable medical care. However, it's crucial to keep in mind that CareCredit (and other comparable health care credit card firms) exist to turn a profit. They take advantage of the fact that many customers overextend themselves and are unable to pay their debts in full by providing no-interest financing. Those that experience this predicament frequently incur high finance fees.
Some healthcare companies provide branded medical credit cards, which are effectively unsecured lines of credit. The card cannot be used for regular purchases because it is not genuinely a part of the Visa and Mastercard payment network. Instead, it's a means for doctors to let patients pay for discretionary operations like cosmetic surgery that aren't covered by insurance. Similar to private label retail shop credit cards, these products typically offer fewer possibilities for usage and higher long-term interest rates than standard credit cards.
Criticism of CareCredit
CareCredit "misled some consumers during the enrolling process by not providing enough counsel clearly spelling out the conditions of the deferred-interest loans," the Consumer Financial Protection Bureau (CFPB) claims.
These loans charge interest starting on the day of purchase and continuing during the campaign. Therefore, if cardholders are unable to pay the balance in full by the end of that time period, they must pay the interest that has accrued (not just interest on the remaining balance).
CareCredit, which at the time was a division of GE Capital, was mandated by the CFPB to repay $34.1 million to cardholders in 2013.
In order to ensure that every CareCredit card applicant is given a clear, understandable explanation of the financing choices available, the company developed a CareCredit Certification alongside its providers.
However, not all providers provide the company's "promotional financing alternatives," which are those with no interest or a very low rate. Cardholders should contact their provider to learn more about the choices available.
Cardholders are advised by CareCredit that "Your card issuer will waive the interest you accrue under this type of promo financing, which may be advertised as having no interest if paid within 12 months, or however long the agreed-upon promotional period lasts, if your balance is paid in full by the end of the promotional period. If you don't pay off the balance in full by the conclusion of the promotional period, the accumulated interest will be calculated and applied to your balance because it starts to accumulate from the day of purchase or balance transfer."
Alternatives of CareCredit
There are alternatives to CareCredit if that sounds unappealing for you to pay for your medical expenses. Check to determine if your service provider provides a pay-over-time plan on a private basis. Many sizable clinics and institutions offer repayment programs with no interest or fees as long as you make timely payments.
Consider opening a Health Savings Account (HSA) if your health insurance plan offers it: Pretax contributions are made, typically deducted from your salary, and until they are used for approved medical costs, the money grows tax-free. There is a comparable tax-advantaged account, The Flexible Spending Account (FSA), if you participate in your employer's group insurance plan, but you typically must use up all the money within the year you contribute them.
You may want to just get a personal loan from a bank or credit union instead because CareCredit acts somewhat like a loan with a predetermined repayment time. If you don't pay off your entire bill by the end of the month, you'll accrue interest, but it'll probably be cheaper than the interest charged by CareCredit.
Finally, as an alternative to CareCredit, think about utilizing a standard credit card. Consider applying for a card with a 0% APR deal if you see one to utilize for paying your medical bills. The required minimum payments can be less. These promotional periods frequently last for 18 or 24 months, which is comparable to CareCredit's length. Additionally, even if you haven't made a full payment by the time the promotion expires, you'll likely pay a lesser interest rate—and only on the outstanding balance.
For CareCredit, What Credit Score is Required?
Both the minimum credit score required to be approved for CareCredit and the credit bureau Synchrony utilizes to obtain credit reports are not disclosed to customers. Similar-functioning cards, such as proprietary shop credit cards, typically have lax credit score restrictions. As a result, it might be simpler for those with little or bad credit history to get a CareCredit card.
Is CareCredit Subject to Annual Fees?
No. However, there are penalties for missing a payment.
How Differs CareCredit From a Standard Credit Card?
A credit card made especially for medical and wellness requirements is called CareCredit. It is useless for anything or anywhere. Instead, it is meant to cover medical costs at different hospitals, veterinary clinics, dental offices, and private medical practice organizations, as well as at health-related shops and pharmacies. The business estimates that there are roughly 250,000 providers total.
Financing conditions for the card frequently differ from those of a typical credit card. It functions as a short- or long-term loan in place of a continuing, revolving credit line and interest fees. If you don't pay the entire sum by the conclusion of the promotional period, interest will start to accrue backwards from the charge date.
Is Getting a CareCredit Card Worth It?
It might be, especially if the provider doesn't accept credit cards and you have a significant medical bill that isn't (or isn't fully) covered by health insurance. CareCredit, however, operates more like a loan than a credit card. It offers different length payment plans where you pay the debt off with minimum payments each month. You don't pay interest during that time, but if you don't pay off the entire sum by the end of the term, you will be charged interest at a high rate (currently 26.99%) retrospectively from the day of purchase of the service—on your entire initial balance, in other words.
The Bottom Line
The Verdict Medical credit cards offer a means to make medical costs more affordable. Of course, consumers must keep in mind that the for-profit businesses who offer the funding for these credit cards are in the business of making money. If you're not careful, the accompanying fees could cost you a lot of money.
Health care-focused credit cards, like all credit cards, should be used responsibly and cautiously because breaking the conditions of the account agreement will result in a negative report to the credit bureaus and lower your credit score. This entails reading the small print and fully comprehending the conditions and related costs.
