CareCredit Review: Picture this, your daughter unexpectedly breaks her ankle while roller skating – necessitating a trip to the ER, some X-rays, and an orthopedics consult.
CareCredit Review
According to the U.S. Department of Health, the average cost of treating a broken ankle is around $7,000. Most people don’t have that kind of cash lying around.
Your deductible is $5,000, and a 20% coinsurance requirement after that.
That means you’ll have to come up with $5,400 in cash on your own. Your insurance company will only pay $1,600.
That’s where the CareCredit credit card comes in: it provides a way to borrow the out-of-pocket cost of treating your child’s broken ankle, and lets you pay it off over time.
Sounds great so far!
But the devil, they say, is in the details.
Let’s take a closer look:
About Our CareCredit Review
CareCredit, issued by Synchrony Bank, is a limited use consumer credit marketed at people who need help paying for out-of-pocket medical expenses.
It offers a variety of financing options, including zero-interest financing and low interest rates. However, before you use CareCredit, it’s important to understand the terms and conditions so you can make sure it’s a good deal for you.
Here’s what the CareCredit card offers:
- Two repayment options.
- Option 1. Zero Interest Promotional Period. You get zero-interest financing if you pay your balance off with a promotional period over 6, 12, 18, or 24 months. Minimum payment applies. Amount financed must be $200 or more.
- Option 2. Lower Interest Extended Pay Plan (for more time to pay).
- Deferred interest. This means that you can pay for your purchase over time and defer the interest charges until the end of the promotional period. Sounds good so far, but there’s a catch: if you don’t pay off your balance in full by the end of the promotional period, you will be charged interest on the entire amount. And at today’s credit card interest rates, that can amount to quite a hit. The company is banking that a significant number of people will not be able to pay off their balances during the promotional period. They will be delighted to add the interest to your balance at the end of the term, and let it compound.
- Extended financing is available. There’s no zero-interest promotional period. But if you qualify, you can get a much lower interest rate of 13.90%. If you know you can’t pay off the balance during the zero-interest period, this may be better than borrowing on another credit card.
- Flexible repayment options. CareCredit offers a variety of repayment options, so you can choose the one that best fits your budget. You can choose to pay off your balance in full, make monthly payments, or set up a payment plan. All good. But as we noted, you really want to be sure your payments will pay the card off in full, before the promotional period expires.
- No annual fee. CareCredit does not charge an annual fee.
- 24/7 customer service. CareCredit offers 24/7 customer service, so you can always get help with your account or questions.
- Grace period: 23 days if no prior balance. This is a shorter grace period than consumer credit cards are required to provide under the CARD Act. But CareCredit is designed to be exempt from the CARD Act.
- Veterinary services. You can use your CareCredit card to pay for veterinary services with any veterinarian that accepts the card.
- Cosmetic procedures. Most health insurance plans don’t cover purely cosmetic procedures. But you can finance them using the CareCredit card.
Compare Pricing on the Best Insurance Plans Available
CareCredit Disadvantages
There are a few cons to using CareCredit, including:
- Higher interest rates after zero-interest promotional offer. After the zero-interest promotional period, the CareCredit interest rate zooms to Prime +18.99. As of early March 2024, the interest rate on CareCredit debt under this repayment plan was as high as 29.99%. That’s on the expensive side – especially when you consider the average interest rate on other no-annual fee credit cards is just 24%, according to research by Lending Tree. Furthermore, under the current credit agreement, in no circumstances will the interest rate on the card drop below 22.98%.
- Late payment fees. Care Credit charges a late payment fee, The fee depends on your balance: it’s $29 if your balance is $249.99 or less, and $39 on a balance balance of $250.00 or more. Those are the highest late fees the law allows. That means you could potentially pay a late fee of even more than your entire balance. This is a very bad deal if you have other options.
- Limited use. Unlike most other “credit card” products, you can’t use CareCredit wherever Visa and MasterCard are accepted”. You can only use CareCredit with doctors and other medical providers who have contracted with the card.Cash advances are available, but for a fee of 4% of the amount advanced, with a $5 minimum.
Tip. Many providers will offer you a discount if you pay with cash up front rather than financing. If you can raise the money from any other source, ask for this cash discount.
If you are enrolled in a health sharing plan, it’s a good idea to have their concierge desk or bill negotiation service negotiate for you – ideally before you receive care, if possible.
This way, you preserve your “walk-away” power.
Credit Check
When you apply, CareCredit does run a credit check. But it’s a “soft-pull” that has no impact on your credit score.
- Health share concierge desk. Care Credit offers a health share concierge desk that can help you negotiate lower prices with healthcare providers. This can be a helpful resource if you’re trying to save money on your healthcare costs.
| Feature | Pros | Cons |
|---|---|---|
| Interest-free financing | Allows you to spread out payments over time, making it easier to afford expensive medical procedures. | APR can be high if you don't pay off your balance in full.during the promotional period. |
| Low interest option | The extended repayment plan doesn’t have a zero-interest promotional period. But rates are lower than most credit cards for this option. | No zero-interest period on this option. You must pay interest until you pay off the balance in full. |
| Flexible repayment terms | You can choose a zero-interest repayment term that works best for you, typically between 6 and 24 months. | Rate goes to 29.99 percent when the promotional period expires. |
| No annual fee | There is no annual fee for using CareCredit. | Some other medical credit cards charge an annual fee. |
| Wide acceptance | CareCredit is accepted at over 200,000 locations nationwide.But only with healthcare providers. | Some other medical credit cards are not accepted as widely. |
| 24/7 customer service | CareCredit offers 24/7 customer service in case you have any questions or need help. | Other medical credit cards may not offer as much customer service support. |
The BEST Way to Pay Out-of-Pocket Healthcare Costs
Hands down, the best way to pay for out-of-pocket medical expenses is to use a Health Savings Account (HSA).
HSAs are tax-advantaged savings accounts you can use to pay for qualified medical expenses.
HSAs offer a triple tax advantage:
- Contributions are tax-deductible.
- The money in an HSA grows tax-deferred.
- With withdrawals are tax-free for qualified medical expenses.
This means that you can save money on taxes now and in the future.
Note: To contribute to a health savings account, you must be enrolled in a qualifying high deductible health plan (HDHP).
If you’re self-employed or a verifiable business owner, you may also be able to contribute by enrolling in an HSA MEC limited minimum essential coverage plan – a low-cost, money-saving policy that meets the requirements of an HDHP and allows you to contribute to an HSA, even if you have a healthsharing plan rather than a formal traditional health insurance product.
To learn more, or enroll in an HDHP or get qualified to contribute to an HSA, click here, and make an appointment with a Personal Benefits Manager. It’s free, and easy!
LEARN MORE: How Much Can an HSA Save in Taxes?
Other CareCredit Review Options
CareCredit can be a godsend for some people.
It can work very well for you if you can’t afford to pay your up-front medical costs in cash but you are reasonably certain you can pay off the entire amount during the zero-interest period.
And the extended financing option currently has an interest rate that is much lower than average credit card rates. So if you can afford the minimum payment, and have no other options, this can be a reasonable option for you.
If you don’t fall in this category, you should explore these other options:
- Make a personal financing agreement with your provider.
- Personal loans from banks and credit unions, or even friends and family.
- Other healthcare credit cards. There are a few healthcare credit cards available that offer special financing options for medical expenses. These cards typically have lower interest rates than regular credit cards, and they may offer promotional interest rates or other rewards.
- Loans against life insurance. If you have a cash value life insurance policy, you can borrow against the cash value to pay for healthcare expenses. There’s no tax on this, as long as you don’t let your policy lapse. There’s also no medical underwriting, and no credit check. You can pay yourself back, or let the eventual death benefit pay off the loan and interest. The life insurance company isn’t worried. They know you’re good for it.
- Hospitalization or accident indemnity insurance. Accident indemnity insurance provides a cash benefit directly to you for medical expenses and lost wages resulting from an accident or qualifying hospitalization. You can use it for any purpose you want. Some policies may also include coverage for death or dismemberment.
- Care coordination services. Some healthcare providers offer care coordination services that can help you find the best financing options for your healthcare needs. These services may also help you negotiate lower prices with healthcare providers.
Compare Pricing on the Best HealthShare Plans Available
What To Do Now
While CareCredit can be a helpful option for some people, there are some serious drawbacks, as well.
You should absolutely consider some alternative ways to bridge the
If you’re interested in learning more about HSAs or other ways to save money on your health care costs, please make an appointment with a Personal Benefits Advisor.
It’s easy, and there’s never any charge.
Disclaimer: Neither the author, nor HSA for America, is compensated by CareCredit or the issuing bank, Synchrony, in any way for this review.
For Further Reading: How to Pay for Pregnancy and Childcare Expenses | Can I Use an HSA To Pay for Counseling Or Therapy? | How to Get The Most Out Of Your HSA
Wiley is President of HSA for America. He believes that consumers should have choice and price transparency, so they can make the best healthcare decisions for their needs. Read more about Wiley on his Bio page.