Medical debt is a huge problem in the United States, with one out of five Americans dealing with some kind of medical debt. US health care spending increased 9.7 percent to reach $4.1 trillion in 2020, and medical expenses were the cause of 62% of all bankruptcies.
While some people can afford to pay their bills as they go along, many others find themselves in massive amounts of debt due to a sudden emergency or medical condition that stops them from working.
So, what is a consumer to do? One option is getting a CareCredit medical credit card.
What is a medical credit card “CareCredit”?
Medical credit cards also known as “CareCredit” are intended to help with the cost of copays, deductibles, and other medical expenses not covered by traditional insurance plans. Medical credit cards can also provide financing for elective procedures that may or may not be covered by insurance.
9 Facts to Know Before Signing-Up for CareCredit
In this article, we go over 9 things you need to know before signing up for a CareCredit medical credit card.
- How do medical credit cards work?
- Does a medical credit card affect credit score?
- What credit score is needed for a medical credit card?
- Does CareCredit do a hard pull?
- What is the highest credit limit for CareCredit?
- What can CareCredit be used for?
- Can I use my CareCredit card for gas?
- Can I use CareCredit to finance my tattoo or piercing?
- Does CareCredit charge an annual or monthly fee?
How do medical credit cards work?
It’s important for consumers to know that medical credit cards are not insurance policies and will never cover regular, everyday expenses. They do not work like a Health Savings Account (HSA), for example, which can be used for any expense related to healthcare.
A medical credit card is only intended for use on medical procedures, copays, deductibles, and elective procedures. You can also use it to purchase personal health and wellness products at over 250,000 healthcare providers and retailers throughout the country.
Does a medical credit card affect credit score?
Medical credit cards will affect your credit score just like other types of revolving credit card debt. Making minimum monthly payments on time will help improve your score while being late or missing payments altogether will hurt your score.
Getting prequalified for a CareCredit account will not affect your score, because it’s a soft pull. However, getting approved or declined for an account will!
What credit score is needed for a medical credit card?
You can get approved for a CareCredit medical credit card with a credit score as low as 620 or higher. Having a lower credit score doesn’t necessarily mean you won’t get approved. Some who have a clean credit history have also reported getting approved with a credit score of 600.
Your credit score will ultimately determine the amount of interest you will be paying on your medical credit card. The lower your score, the higher your interest rate will be. If you have insufficient or no credit history at all, then your interest rates could also be very high depending on how qualified you are for approval.
Does CareCredit do a hard pull?
Getting prequalified for a CareCredit only requires a soft inquiry into your credit score. However, CareCredit will do a hard pull on your credit score if you decide to continue with your prequalified application.
Prequalification only takes less than a minute and can be done online using this link or over the phone with a live agent M-F between 9 AM and 9 PM EST.
What is the highest credit limit for CareCredit?
The highest credit limit CareCredit will approve you for is between $25,000. And like traditional revolving credit cards, CareCredit determines your credit limit based on your credit score, credit history, and other factors.
You can also request an increase to your credit limit by calling (866) 893-7864 and speaking to a live agent during normal business hours.
What can CareCredit be used for?
CareCredit is only intended to pay for your health, wellness, and personal care needs. It is not intended for everyday expenses that may be reimbursed by insurance companies.
There are many health and personal care products you can purchase with your CareCredit card. And there are over 225,000 healthcare providers and retailers which accept it including Walmart, CVS, Rite-Aid, and even Sam’s Club.
Can I use my CareCredit card for gas?
You cannot use your CareCredit to pay for gas or other travel expenses, even if it’s for medical purposes. Some health insurance policies will pay for gas mileage if you’re traveling to and from your health care provider. But you will need to use your regular credit card to pay for the gas and file for reimbursement with your insurance provider.
Can I use CareCredit to finance my tattoo or piercing?
CareCredit cannot be used for tattoos or piercings. However, you can use it to finance tattoo removal and other non-surgical or minimally invasive cosmetic procedures and treatments.
Below is a list of all the procedures you can finance with CareCredit:
- Injectables and Fillers (Botox® Cosmetic, Dysport™, Xeomin®, Juvederm®)
- Chemical peels
- Laser hair removal
- Microdermabrasion
- IPL/ Laser treatments
- Tattoo Removal
- Coolsculpting®
Does CareCredit charge an annual or monthly fee?
There are no annual or monthly fees to open and use a CareCredit account. However, they do charge late fees on missed or late payments. The late fees can range between $15 and $39 depending on the card issuer’s policy and your payment history.
You can avoid any late fees by making at least the minimum payment on or before the day it is due.
Conclusion
CareCredit is a great financing option for medical expenses as well as personal health and wellness products. It has no annual or monthly fees and you can get prequalified in seconds!
Anyone can apply for CareCredit with a credit score as low as 600. It offers credit lines ranging from $200 to $25,000 depending on your current financial situation and which card issuer you get approved by.
In this article, we’ve explored how CareCredit can be used to finance health care costs and expenses. We also provided answers to the most frequently asked questions about CareCredit in order to clarify misinformation in a helpful way. Hopefully, you have learned a lot from this post and it will help you better understand what all you can do with this card.
