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Q: I have a lot of medical expenses and the hospital is urging me to apply for a medical credit card, but it seems a little weird to me. Could this be a scam?
A: They’re not a scam. They are a real option for those with medical expenses that they can’t pay for out of pocket.
This doesn’t mean they can’t be harmful, but generally these cards aren’t intended to deceive or rip off anyone. They may be given to people who can’t afford the monthly payments, however. Which could be seen as predatory.
Medical credit cards usually cannot be used for anything other than medical procedures, which makes them less like a credit card and more like a loan.
Like a credit card, though, there are monthly payments, as well as fees for being late.
Services such as CareCredit offer payment plans of different lengths depending on the cost of the procedure, such as 6, 12, or 18 months. They may market the plan as being interest-free or low-interest, but this is only true if you pay it off within a certain amount of time.
If you make a late payment or don’t pay off the entire balance within the period, they will charge you retroactive interest, meaning interest starting from when you took out the loan.
As you can see, although they are technically not scamming people, medical credit cards can sometimes prey on those who are desperate enough to pay high interest rates or commit to a payment plan that they might not be able to stick to.
If you need credit for your medical expenses, make sure you read the fine print so that you aren’t stuck with high payments that you can’t afford.
There’s nothing worse than being hassled by debt collectors when you’re trying to recover.