Photo: Shutterstock / Shutterstock
Although medical credit cards have become a valuable tool for paying for treatments and more amid expensive medical care and an adverse economic situation for the average American struggling with high prices, Experts point out that the use of these cards can be a great disadvantage for finances.
According to a study by the Consumer Financial Protection Bureaumedical credit cards have become attractive because they offer 0% deferred interest, But if it is not paid before the grace period, that agreement may become unfavorable for borrowers.
That is, if not paid, you will be charged all charges with interest accumulated from the date of application, according to the agency due to this recharge. Between 2018 and 2020, many Americans had to pay billions of dollars in interest.
The medical credit card is a bank debt
Patricia Kelmar, senior director of health care campaigns at US PIRG highlighted that “By the time you go into a medical credit card, it is not considered medical debt; It is not owed to a medical provider, but to a bank. “There are certain protections against how medical debt can be collected and how it shows up on a credit report or how it shows up on your credit score,” he said.
Additionally, according to the US Public Interest Research Group report, these cards do not provide the financial protection for medical debt as they would for a hospital or medical care bill. “People are turning to these credit cards to pay bills, but it is not working well for those who have to declare bankruptcy“Kelmar highlighted.
Which is the best option?
Understanding that with the general high prices for the average American it becomes difficult to pay for some medical services, Kelmar recommended in these cases not to opt for a credit card but rather a payment plan with a health care provider that can fit your budget. . “Before these products were available, people simply worked out a payment plan with their provider”, said.
Likewise, he recommended not making financial decisions in the midst of difficult situations “especially if you do not feel well or have received bad news. “These are emotional times, and making a decision right now probably doesn’t prepare you for the best outcome,” he noted.
Keep reading:
- 4 in 10 families with children in the US skip meals due to low income, according to a new study
- American consumers are becoming more cautious about the economy. Why?
- Do you want to minimize taxes on your Social Security? Experts explain how to do it