Medical credit cards can be used to pay for services rendered by veterinarians, dentists, and doctors as well as for health and wellness products sold by particular stores. However, before applying for a medical credit card, be careful to read the deferred-interest terms.
Sandra Lynn, a native of Texas, didn’t want to spend her roughly $5,000 in savings on several root canals that weren’t covered by her insurance. Rather, her dentist offered the 62-year-old a medical credit card, which is a revolving line of consumer credit with delayed interest.
To cover the cost of the initial root canal, Lynn charged the card about $1,900. However, when she tried to use the same card to pay for the other two teeth when she returned to the office, she was informed that she needed to settle the debt first. When she applied for the card, she was not informed that the credit limit could not be increased to cover both surgeries.
“I don’t live paycheck to paycheck, so I consider myself fortunate,” Lynn remarked. Although she initially intended to spread out the payments for both surgeries over a year, she ended up paying off the first procedure early so she could proceed with the second procedure.
“I just wanted to use [the medical credit card] because, you know, you spend your savings on one thing, and then something else happens,” Lynn explained. “But I sat on it for about a month, and I said, ‘I really need this done,’ and I paid it off and I got the rest of the work done.”
Medical credit cards enable users to finance services like dentist checkups, medical operations, or insurance copays with 0% interest for a set amount of time, usually six to 18 months. These cards can be used to pay costs that range from $35 to $40,000.
However, Lynn’s experience draws attention to a hidden risk: If the conditions aren’t made explicit up front, cardholders may face huge unanticipated expenses. And individuals risk drowning in unforeseen debt if they fail to pay off their balance before the deferred-interest term expires.
More physicians, dentists, and even veterinarians are providing this kind of financing as consumers cope with ongoing medical inflation—in August, the cost of medical care services increased 4.2% year over year. According to Patricia Kelmar, senior director of healthcare campaigns at the Public Interest Research Group, a medical credit card moves a patient’s debt from the doctor’s office to a bank. This debt is then categorized as consumer debt, which means the patient and bank now have a financial relationship instead of the patient and the hospital or doctor’s office.
Although there is no publicly available data on medical credit card usage, annual financial reports reveal that between 2021 and 2024, the number of active health and wellness accounts with Synchrony Financial (SYF), the company that issues the CareCredit card, increased by 35%, from 5.7 million to 7.7 million.
Experts predict that as healthcare costs continue to climb, so too will patients’ dependency on medical credit cards. “This financial struggle is expected to worsen if Congress does not extend an Affordable Care Act tax credit that helps lower insurance costs and that is set to expire at the end of the year,” they say, referring to changes to Medicaid and Medicare in the GOP’s One Big Beautiful Bill Act that will tighten eligibility rules and add more verification requirements.
“If people can no longer rely on these subsidies, they will have to pay out of pocket for really high premium increases,” stated Mona Shah, senior director of policy and strategy at Community Catalyst, a nonprofit organization that advocates for health. “We certainly see people being more attracted to these deferred-interest medical-payment products and credit cards in healthcare settings, which is just going to exacerbate the medical-debt crisis.”
Why using a medical credit card can be dangerous
According to experts, banks that supply medical credit cards occasionally collaborate with healthcare providers, who then let patients use the card as a form of payment. Payment with a medical credit card covers those costs immediately without having to deal with the insurance bureaucracy, but it also transfers the entire financial burden to the patient. This is important from the standpoint of clinics that are overrun with insurance-claim denials and are waiting to be paid for services already rendered. These cards can also be used by patients to pay for out-of-pocket expenses in addition to their insurance.
See more: Seniors may be burdened with thousands of dollars in medical debt due to this little-known change to Medicaid regulations.
According to Kelmar, many people accept the financial goods presented without scrutiny because of the implicit confidence that exists between a patient and their doctor.
“It’s irresponsible of the providers to be doing that, and it’s predatory on the patient who is needing that care and knows what’s standing between them and their doctor appointment is this easy way to pay the bill,” she stated.
However, according to Imamu Tomlinson, CEO of Vituity, a physician-led medical staffing company, doctors aren’t always concerned with the financial aspect of their profession. For medical professionals whose patients are unable to pay for their services in full, a credit card may appear like a simple fix, he continued.
According to Tomlinson, a California emergency physician in practice, “Most providers and health systems have such low operating margins that in many cases, [patient] financing might be the only option.” “Providers are finding any way they can to support patients and remain financially solvent – which is even tougher in an environment with Medicaid and Medicare cuts.”
According to Shah, interest rates on medical credit cards can reach 32.99% once the introductory period with no interest expires. Additionally, these cards frequently retrospectively charge interest collected since the purchase date if the balance isn’t paid off in full, leaving patients feeling caught off guard by the hefty bill.
“If you’re unable to pay off the debt … that will impact your credit score and impact people’s abilities to rent, purchase cars, secure loans,” Shah explained.
“The choice is ultimately the consumer’s,” CareCredit stated in a letter response to MarketWatch’s inquiries. “Restricting access to credit to pay for health and wellness care means fewer people will get the care they want when they want it.”
However, consumer advocacy groups like PIRG and Community Catalyst are calling for the prohibition of medical credit cards in doctor’s offices in order to protect people who are already struggling with health concerns from what they describe as predatory lending practices. However, experts say it’s a difficult fight, and the growing use of medical credit cards is a sign of the US healthcare system’s growing inaccessibility.
Medical credit cards are “symptoms of a bigger problem,” according to Gary Jacobs, executive director of public policy and government relations for VillageMD, a healthcare organization. “This is a short-term solution to a politically created problem.”
Medical credit cards, according to card issuers, can result in substantial interest savings.
A number of medical credit card users have declared bankruptcy. Even when compared to other healthcare systems in the state, CareCredit had the highest median debt per bankruptcy filer and was the most commonly stated medical debt holder, according to a 2019 study of bankruptcy filings in Oregon. Because of the type of transactions made on the card, the research classified the lender under medical debt even though CareCredit card purchases are legally consumer debt.
The “vast majority” of its cards are prime or superprime borrowers, which means they have good credit and are at low risk of default, according to CareCredit, which stated that it does not have access to current Oregon bankruptcy filing data. According to the company, about 80% of its clients pay off their cards before incurring interest.
According to a 2023 Consumer Financial Protection Bureau study, Synchrony Financial’s CareCredit, Wells Fargo (WFC), and Comenity, a division of Bread Financial (BFH), are the three primary financial institutions that provide medical credit cards.
According to CareCredit, physicians pay for the privilege of allowing their patients to use the card. As long as the debt is paid off before the deferred-interest period expires, consumers can save a substantial amount of money on interest when compared to a standard credit card or installment loan. According to the company, it calls cardholders after their first charge is processed and displays the date on bills when interest will start to accumulate in a huge red font to make sure customers understand how deferred interest works. Additionally, according to CareCredit, it helps cardholders who are experiencing financial difficulties and training physicians to inform patients about the card upfront.
Healthcare providers and hospitals account for only around 1% of CareCredit’s total purchases; in fact, the company calls its product a “health and wellness” card. Dental care, veterinary care, and retail goods like vitamins, exercise gear, and Sleep Number (SNBR) beds make up the remaining 99 percent. The amount that users spend in each category was not disclosed by the company.
The Health Advantage card, a financing option for veterinary, dental, audiology, and eye care with an interest rate ceiling of 12.99%, was discontinued by Wells Fargo last year.
In a statement to MarketWatch, Wells Fargo stated that “Health Advantage was not in line with our long-term growth strategy and represented a small fraction of the overall private label credit card business.” “We stopped accepting new customers for this product in September of 2024.”
