Medical Credit Cards: 2021 Complete Guide To Medical Credit Cards and Medical Financing

Medical Credit Cards: 2021 Complete Guide To Medical Credit Cards and Medical Financing

By: Michael Wong

Disclosure:  Michael Wong is a cofounder of Walnut. Walnut is a modern and ethical option for people looking to split their medical bill into affordable monthly payments. Find out more at 


For decades, the trusty credit card has been a staple in the American wallet. Many have depended on this 3×2 in. card to help them pay for expenses they otherwise couldn’t afford. More recently, with the meteoric rise of medical debt, a specialized type of credit card has materialized - the medical credit card.

For people unable to cover medical expenses upfront, a medical credit card like CareCredit, helps cover the expense and allows the user to pay over time. However, medical credit cards may not be for everyone and many come with significant pitfalls that can end trapping users in a debt cycle. So in this article, we are going through a complete guide to covering hospital and medical bills with a medical credit card.

What Is a Medical Credit Card?

A medical credit card is similar to a regular credit card, except it is used specifically to cover healthcare expenses. Additionally, these cards usually cover certain services and may be used only with certain medical providers.  Here are some services that medical credit cards can cover:

  • Cosmetic surgery
  • Dental procedures
  • Dermatology 
  • Lasik and Vision
  • Veterinary and Pet Care
  • Hearing aids
  • Chiropractor

Unsurprisingly, many have looked for alternative options like medical credit cards to cover their expenses. Many have argued that the medical, veterinary, and dental credit cards are filling a need for cash-crunched users, but others point to the high interest rates and possible predatory lending. Before you decide whether or not a medical credit card is right for you, there are some unique and distinct advantages and disadvantages that come with using a medical credit card. Let’s weigh the pros and cons below:

What Are The Benefits of a Medical Credit Card?

There are some clear benefits of using a medical credit card. These include:

  • Quick approval: Medical credit cards are known for their quick, sometimes instant approval process. These applications often take place conveniently at a health care professional’s office.

  • Pay Over Time: One of the core benefits of a medical credit card (and any credit card) is the ability to pay over time. This greatly reduces the immediate financial burden, as well as allows users to get the care they need. However, the drawback is that the debt is stretched over a certain period.

  • Promotional and Deferred Interest: Many medical credit cards offer an introductory or promotional 0% interest term, often in the form of deferred interest. This is rather enticing, but it is also one of the biggest pitfalls when it comes to medical credit cards. Let’s discuss that below.

What are the Cons of Medical Credit Cards? 

  • Deferred Interest: While a 0% introductory rate attracts new customers, it is not without its stipulations. This introductory rate can last between 3-24 months. If the patient fails to pay their balance in full by the end of this period, or is late or misses a payment, then they are hit with a huge penalty. The 0% rate ends and a higher regular interest rate kicks in, and applies retroactively to the cardholder’s entire original balance. That interest rate can be up to 30%.

  • Deceptive Lending Practices: Many customers are unaware of the practice of deferred interest and are reasonably upset when it happens. Care Credit, one of the largest medical credit card providers, was spotlighted in a class-action lawsuit for it’s deceptive lending practices. Many patients are pushed towards these cards, often without receiving information regarding the basic terms.

  • Harassment: In the lawsuit above, many customers complained of harassment and pressure to apply for medical credit cards, and many were spammed with promotional material. 

  • Limited Use: Unlike your Visa or MasterCard, they only cover medical services and only when the service provider accepts that particular payment method. You won't be able to use your credit card for other non-medical purchases. 

What Are Some Factors I Should Consider?

Here are a few key factors to consider when shopping for medical credit cards:

Does My Provider Accept Medical Credit Cards:  Again, medical credit cards only work for certain procedures and with certain providers. If your provider does not accept this type of payment, then it’s a non-starter. However, talk to your provider - they may offer alternative financing and payment plans. 

Deferred Interest Rate Terms: To avoid a surprise interest hike, scrutinize the terms of your medical credit card. Make sure you read and understand every line. Find out what the deferred interest rate terms are, and make sure you are able to pay off your loan before then if possible. 

There are a ton of online calculators that can help you visualize and play with the numbers. Because it can be a monumental penalty, it doesn’t hurt to set a calendar alert or automatic payment plan to make sure your debt is paid off by the end of the promotional period. 

Late Payment Fee: Not only does making a late payment kick in deferred interest, but you may also be charged a late payment fee. 

Time For Approval:  While  most applications are quick, some applications are lengthier than others. Additionally, some take time to send you a physical credit card.  

Is A Medical Credit Card Better Than A Regular Credit Card?

Oftentimes, the answer is no. While they are similar (allows you to pay-over-time), medical credit cards are more restrictive and have more opaque terms. There are also many benefits of a traditional credit card over a medical credit card. These include:

  • 0% APR Introductory Period: Many credit cards offer a 0% APR period, without deferred interest. 

  • Lower APR: The APR in traditional credit cards are often lower than their medical counterpart.

  • Rewards/Benefits: Many credit cards offer rewards like travel miles, cashback, etc. that medical credit cards do not.

In the end, if you are adamant about using medical credit cards, or find yourself in a situation where it is your only option, please make sure to understand all the terms. This can prevent a medical emergency from becoming a financial one. 


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