CareCredit Review: Everything You Need to Know

You may be familiar with the CareCredit credit card if you need to pay for medical expenses. This credit card can pay for medical, dental, and even veterinary expenses for you, your family, and your pets. In this article, we’ll look closer at the CareCredit credit card, including how it works, what it covers, and how you can apply for it.

Overview

The CareCredit credit card is a healthcare credit card that can be used to pay for uninsured medical expenses. More than 240,000 healthcare providers in the United States, including doctors, dentists, and veterinarians, accept it. The card can be used to pay for a wide range of medical costs, from regular checkups to major surgeries, as well as deductibles, co-payments, and prescription medications.

Medical bills can be difficult and costly to pay. As a result, GE Capital, JPMorgan Chase, Citigroup, Capital One, UnitedHealth Group, and Humana all offer credit cards to help with the high cost of health care. Many of these companies dropped out of the program, but consumers can still obtain revolving credit lines for health care.

CareCredit from Synchrony Financial (SYF) is one of these credit lines. It is one of the largest private-label credit card providers in the United States, and it has agreements with many healthcare providers to accept its card. Over 250,000 US healthcare providers get the card.

These cards can be used to pay medical bills but are expensive. It will cost you if you do not pay off your CareCredit balance by the end of your promotional period.

How Does CareCredit Works?

When you use the CareCredit credit card to pay medical bills, you effectively take out a loan that must be repaid over time. The card gives you many ways to pay for things, including interest-free financing for a limited time and funding with interest costs for longer terms.

On purchases of $200 or more, you can secure six months of interest-free financing. If you do not pay off your balance within six months, you will be charged interest on the outstanding sum. Your creditworthiness and other variables will determine the interest rate you pay.

In specific ways, the CareCredit card functions similarly to a traditional credit card. The sole distinction is that it can only reimburse regular medical insurance copayments for covered treatments. The card can also be used for elective medical procedures that standard insurance policies do not cover. The card can be used for a wide range of medical and wellness services such as eye care, cosmetic surgery, services for people with skin conditions, dental care, and hearing care.

Financing Offers

One of the main attractions of the CareCredit credit card is the promotional financing offers. If you make a qualifying medical purchase of $200 or more, you may be eligible for 0% APR for 6–24 months. However, as mentioned earlier, it’s essential to understand that these financing deals are deferred interest. If you don’t pay off your balance by the end of the promotional period, you’ll be charged interest retroactively from the date of purchase.

However, remember that these cards’ indicated annual percentage rate (APR) is far higher, at 26.99%.
It also provides longer-term health care financing with APRs ranging from 14.9% to 17.9% for 24, 36, 48, or 60-month terms. You will be charged late fees ranging from $15 to $39 per statement period if you are late.

How to Apply for CareCredit

You can submit an application for the CareCredit credit card online or over the phone. Accordingly, the application procedure is relatively straightforward, and approval can be swift, with some candidates receiving an instantaneous response. CareCredit’s prequalification service is available online at CareCredit.com/Apply.

If you prefer to avoid applying online, you can call the company at its toll-free number: 1-800-670-0718. Monday through Friday, between 9 a.m. and 9 p.m. ET, you can submit an application using an automated system or with a live person.

You can also apply for CareCredit in person at over 250,000 healthcare providers and select retail locations. CareCredit does not accept faxed or emailed applications.

Requirements

CareCredit offers anyone a way to determine eligibility for a card. This decision will have no impact on your credit score. You must supply Synchrony with the following information to apply:

• Name
• Address
• Date of birth
• Social Security number (SSN) or individual taxpayer identification number (ITIN)
• Net income
• Housing Information

Limits

Your credit history determines the credit limit on your CareCredit card. The minimum purchase on these cards is $200, while the highest credit limit for people with trustworthy credit is $25,000.

Because of the high credit limits and simplicity with which CareCredit cards may be secured, they can be an excellent method for those with a bad credit history to pay for medical expenditures. However, be aware that CareCredit cards might be costly if you cannot make your repayments on time.

Special Financing Options

The particular financing options available to CareCredit customers are the primary draws. Short-term promotions give no interest, while long-term promotions offer lower APRs than the standard 26.99%, an APR more incredible than even the best-rated rewards credit cards. The balance must be paid off during the promotional period to avoid delayed interest charges. When applying, cardholders are not required to pick a special offer (It can be selected after approval and before paying for a considerable medical expense). Since not all providers give the same promotional opportunities, checking with a healthcare provider before applying is critical.

Short-Term Financing Options

CareCredit provides no-interest financing for 6, 12, 18, or 24 months on purchases of $200 or more. The amount must be paid in full after the promotional period to avoid interest charges. Suppose the debt is paid in part. In that case, you’ll have to pay the late interest from the day you made the purchase, not during the promotional period like you would with most 0% intro APR credit cards.

Long-Term Financing Options

CareCredit’s long-term alternatives have lower interest rates than the traditional, high purchase APR. There are 24, 36, 48, or 60 months promotional durations with variable APR discounts and fixed monthly payments.

Purchases of $1,000 or more qualify for the following:

• 24 months—14.90% APR
• 36 months—15.90% APR
• 48 months—16.90% APR

Purchases of $2,500 or more are eligible for:

• 60 months—17.90% APR

CareCredit’s long-term plans have fixed monthly payments that let the cardholder pay off the whole debt by the conclusion of the term. Be mindful that these APRs are excessive and that many regular credit cards have lower APRs. We know that only some people have a lot of options when it comes to financing, but we strongly suggest looking into all of them, including lines of credit that aren’t tied to a credit card, before agreeing to pay such high APRs. If you are still getting familiar with APR or need a reminder, please review our guide on APR and our recommendations for what constitutes a good APR.

How To Avoiding Higher Interest

CareCredit is a convenient option for medical expenses. Still, the minimum monthly payments set for short-term promotional periods may not be enough to pay off the balance by the end of the promotional period. Instead, if you apply for and use CareCredit, divide your total debt by the number of months in the promotional period to determine your own equal minimum monthly payment. Minimum payments on CareCredit may leave a balance at the end of the month, resulting in high-interest charges.

For example, a cardholder with a single large debt of $1,800 during a six-month introductory period of zero percent interest should make equal monthly payments of at least $300 to pay off the balance and avoid interest.

Make CareCredit’s minimum monthly payment for short-term financing and pay off the balance in the final month. However, will you have sufficient funds to pay off the balance before interest accrues?

The cardholder’s minimum monthly payment should be sufficient to pay off the debt by the end of promotional periods with lengthy terms (as long as the cardholder makes payments on time every month). If customers know how CareCredit works and pay more monthly, cardholders can lower their interest rates. Additional purchases made during the promotional period may alter the monthly payment allocation.

Risks

CareCredit’s marketing messages and works emphasize giving people access to affordable health care. CareCredit and other companies that offer healthcare credit cards do business to make money. They provide no-interest financing and rely on the fact that many consumers cannot pay their payments in full. Those who find themselves in this predicament frequently incur hefty finance fees.

Some healthcare providers provide branded medical credit cards, which are unsecured credit lines. Since the card is not part of the Visa or Mastercard payment network, it cannot be used to make regular transactions. Instead, it is a mechanism for doctors to allow patients to fund discretionary operations, such as cosmetic surgery, that are not covered by insurance. These products are comparable to store-branded credit cards, with limited use possibilities and higher long-term interest rates.

Criticism

According to the CFPB, CareCredit “misled some consumers during the enrollment process by failing to provide adequate guidance outlining the terms of the loans with deferred interest.”

These loans accrue interest from acquisition to marketing. Cardholders must pay interest if they cannot repay the loan by the due date. (not just pull on the remaining balance).

In 2013, the CFPB ordered CareCredit, a part of GE Capital, to reimburse customers $34.1 million.

To guarantee that every CareCredit card applicant receives a clear, simple explanation of available financing alternatives, the company developed a CareCredit Certification program with its providers.

However, not all vendors provide the company’s “promotional financing options” with no interest or a low-interest rate. Contact your card issuer for available options.

CareCredit informs cardholders, “With this type of promotional financing, which may be advertised as interest-free if paid within a year, or however long the agreed-upon promotional period lasts, interest will be charged if the balance is not paid in full within the specified time frame.” However, as interest accrues from the date of purchase or balance transfer, the accumulated interest will be applied to your balance if the balance is not paid in full during the promotional period, depending on CareCredit works.

Alternatives

CareCredit is one of many methods of payment for medical care. Check with your provider to see if they offer private pay-over-time. Numerous large practices and facilities offer interest-free repayment programs if timely payments are made.

If your health insurance plan offers one, consider opening a Health Savings Account (HSA): Contributions made before taxes grow tax-free until used for eligible healthcare costs.

If you participate in your employer’s group insurance plan, the flexible spending account (FSA) is a comparable tax-advantaged account; however, you must typically use all the money you contribute in the same year.

CareCredit works like a loan with a set amount of time to repay. You should get a personal loan from a bank or credit union instead. You will be charged interest, but it will likely be less expensive than CareCredit’s.

Use a standard credit card rather than CareCredit. You should apply for a credit card with a 0% APR incentive to pay medical bills. Lower minimum payments are possible. Typically, these promotional periods last 18 or 24 months, such as CareCredit’s. Even if you have yet to pay off your balance by the end of the promotional period, you will likely pay a lower interest rate on your credit.

Is CareCredit Credit Card Worth It?

CareCredit Credit Card is worth it, especially if you have a significant medical bill that your health insurance needs to pay for (or doesn’t cover well enough). The practitioner does not accept credit cards. CareCredit operates more like a loan than a credit card. It offers different payment plans with small monthly payments for various lengths. During this period, you don’t pay any interest. Still, if you have yet to pay off the total sum by the end of the term, you’ll be charged interest at a severe rate (currently 26.99%) retroactively from when you purchased the service on your entire initial total. So, the customer must understand the structure and how CareCredit works before deciding.

Conclusion

CareCredit Credit Card can be used to pay for medical bills and related services. Before applying for the card, evaluating the deferred interest and high-interest rates is vital before applying for the card, as is how CareCredit works. Before deciding to use the CareCredit Card, looking into other ways to save money might be a good idea.

CareCredit could be a way to pay for extensive medical bills. Still, potential cardholders should know that the normal APRs are very high after promotional periods with low or no interest. In addition, they should be prepared to compute an equal minimum monthly payment and know how CareCredit works, allowing customers to pay off the entire sum before the end of the promotional term.

FAQs

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Source: Investopedia, Forbes