Enter a new phenomenon – the growth of medical credit cards designed for consumers to help them pay their medical bills. With such enticements as a discount on their medical bills, they have proven attractive for those not covered by health insurance or for those who have lost their jobs or faced with declining employer benefits in healthcare.
But really, the consumer has to be on top of the game; otherwise these credit cards can really hurt your financial health by crippling you with the payment of the hospital bills at the end of the month plus the potentially high finance charges, should you defer paying completely. These medical cards are designed to cover only health-related spending, but for all intents and purposes, behave like ordinary credit cards. That means enormously high interest rates on balances, late payment charges and other fees that you would find in any credit card.
Already, in New York, some of these cards have come under fire. Some of the reasons:
-claiming to charge no interest when in reality carrying interest rates as high as 25%.
-retrograde charges if the balance was not paid in full.
-‘kickbacks’ received by hospitals or doctors for every card issued to patients.
-abuse by clinics and hospitals, like charging on these cards for non-existent services.
Consumers need to be informed on what getting a medical credit card entails. Here are some useful tips:
- A medical card is essentially a credit card and behaves like one.
- Its important to understand the terms and conditions, often buried in small print. Look for the pitfall of a low introductory interest rate which can skyrocket upon a single late payment. Some card issuers have been known to shorten payment cycles without warning, causing the card-holder to be caught unawares.
- Do not pay for services in advance by allowing the provider to swipe your card before receiving the service. Often, its a big hill to climb to get the charges reversed should the service be annulled for whatever reason.
- Avoid signing up when under duress. Notice how medical card companies set up counters in hospitals aiming to prey on those suddenly in need of emergency medical services for which they would normally not be able to afford.
- Sometimes, despite the hassle of filling innumerable claim forms to claim health insurance, they are usually more cost-effective than simply swiping a medical card. Better still, pay cash if you can and ask for a discount or deferred payment plan from the hospital or clinic.