MW Medical credit cards offer a lifeline for cash-strapped patients. These 3 tips can help you avoid the pitfalls.

By Genna Contino

For patients bracing for tightened Medicaid and Medicare rules and loss of ACA subsidies, medical credit cards can be an alluring option

Medical credit cards can be used to pay for services provided by doctors, dentists and veterinarians and even for health and wellness items offered by specific retailers - but make sure you understand the card's deferred-interest terms before signing up.

When Texas resident Sandra Lynn needed multiple root canals that were not covered by insurance, she didn't want to drain her savings of nearly $5,000 to pay for them. Instead, the 62-year-old opened a medical credit card, a revolving line of consumer credit with deferred interest that was offered by her dentist.

Lynn put around $1,900 on the card to pay for the first root canal. But when she returned to the office to fix the remaining two teeth and tried to pay with the same card, she was told she had to pay off the balance first. The credit limit on the card couldn't be extended to cover both procedures - terms that weren't made clear to her when she applied for the card.

Lynn considers herself fortunate, she said, because she doesn't live paycheck to paycheck. She ultimately paid off the first procedure early so she could move forward with the second procedure, despite her original plan to spread out payments for both procedures over a year.

"I just wanted to use [the medical credit card] because, you know, you spend your savings on one thing, and then something else happens," Lynn said. "But I sat on it for about a month, and I said, 'I really need this done,' and I paid it off and I got the rest of the work done."

Medical credit cards, which can be used to pay bills ranging from $35 to $40,000, allow patients to finance services such as medical procedures, dental appointments or insurance copays with 0% interest for a limited period, typically six to 18 months.

But Lynn's experience highlights a hidden risk: Cardholders can incur significant unexpected costs if the terms aren't made clear up front. And those who don't pay off their balance before the deferred-interest period ends can find themselves drowning in unanticipated debt.

As consumers weather persistent medical inflation - the cost of medical-care services grew 4.2% year over year in August - more doctors, dentists and even veterinarians are offering this type of financing. A medical credit card transfers a patient's debt from the doctor's office to a bank, and the ensuing debt is classified as consumer debt - meaning the financial relationship is now between the patient and bank, rather than the patient and the hospital or doctor's office, said Patricia Kelmar, senior director of healthcare campaigns at the Public Interest Research Group.

There's no publicly available data tracking the usage of medical credit cards, but annual financial reports show that the number of active health and wellness accounts with Synchrony Financial (SYF), which offers the CareCredit card, jumped from 5.7 million to 7.7 million, a 35% increase, between 2021 and 2024.

Experts expect patients' reliance on medical credit cards to continue to rise along with the cost of healthcare. Changes to Medicaid and Medicare in the GOP's One Big Beautiful Bill Act that will tighten eligibility rules and add more verification requirements are expected to exacerbate this financial struggle, they add, especially if Congress does not extend an Affordable Care Act tax credit that helps lower insurance costs and that is set to expire at the end of the year.

Read more: Costs could soar next year for people with Obamacare. What you can do about it now.

"People are going to start to see really high premium increases that they're going to have to pay out of pocket if they can no longer count on these subsidies," said Mona Shah, senior director of policy and strategy at the health-advocacy nonprofit Community Catalyst. "We certainly see people being more attracted to these deferred-interest medical-payment products and credit cards in healthcare settings, which is just going to exacerbate the medical-debt crisis."

Why medical credit cards can be risky

Banks that offer medical credit cards sometimes partner with healthcare providers, which then offer the card as a payment option to patients, experts say. From the perspective of clinics that are flooded with insurance-claim denials and are waiting to get paid for services already provided, payment via a medical credit card covers those costs immediately without having to deal with the insurance bureaucracy - but it also passes the full financial burden on to the patient. Patients can also use these cards alongside their insurance to cover out-of-pocket costs.

See more: This little-noticed update to Medicaid rules could burden seniors with thousands in medical debt

Because of the implied trust between a patient and their doctor, many people accept the financial products offered without question, Kelmar said.

"It's irresponsible of the providers to be doing that, and it's predatory on the patient who is needing that care and knows what's standing between them and their doctor appointment is this easy way to pay the bill," she said.

Doctors, however, aren't always focused on the financial side of their practice, said Imamu Tomlinson, the CEO of Vituity, a physician-led medical staffing agency. A credit card can seem like an easy solution for providers whose patients can't afford to pay for their care up front, he added.

"Most providers and health systems have such low operating margins that in many cases, [patient] financing might be the only option," said Tomlinson, a practicing emergency physician in California. "Providers are finding any way they can to support patients and remain financially solvent - which is even tougher in an environment with Medicaid and Medicare cuts."

After the zero-interest promotional period ends, interest rates on medical credit cards can be as high as 32.99%, according to Shah. And if the balance isn't paid off in time, these cards often retroactively charge interest accrued since the purchase date, leaving patients feeling blindsided by the high cost.

See more: U.S. interest rates are way too high, Fed's Miran says, and rising layoffs and unemployment could be the result

"If you're unable to pay off the debt ... that will impact your credit score and impact people's abilities to rent, purchase cars, secure loans," Shah said.

"The choice is ultimately the consumer's," CareCredit said in a written response to questions from MarketWatch. "Restricting access to credit to pay for health and wellness care means fewer people will get the care they want when they want it."

Consumer advocates like PIRG and Community Catalyst, however, want medical credit cards to be banned at doctor's offices to spare patients who are already dealing with health issues from what advocates call predatory lending practices. But experts say it's an uphill battle, and the rising popularity of medical credit cards is symbolic of an increasingly unaffordable American healthcare system.

Medical credit cards are "symptoms of a bigger problem," said Gary Jacobs, executive director of government relations and public policy at the healthcare company VillageMD. "This is a short-term solution to a politically created problem."

Card issuers say medical credit cards can offer significant savings on interest

Some users of medical credit-cards have filed for bankruptcy. A 2019 analysis of Oregon bankruptcy filings found that CareCredit was the most frequently listed medical-debt holder and had the highest median debt per bankruptcy filer, even when compared with healthcare systems in the state. While purchases on CareCredit cards are technically consumer debt, the analysis grouped the lender under medical debt due to the nature of purchases made on the card.

CareCredit said it did not have access to up-to-date Oregon bankruptcy filing data but that the "vast majority" of its cardholders are prime or superprime borrowers, meaning they have good credit and are at low risk of default. Nearly 80% of its customers pay off the card before any interest is charged, the company added.

$Synchrony Financial(SYF-B)$'s CareCredit was listed in a 2023 Consumer Financial Protection Bureau report as one of the three main financial institutions offering medical credit cards, along with Wells Fargo $(WFC)$ and Comenity, a subsidiary of Bread Financial $(BFH)$.

CareCredit says providers pay for the ability to offer the card to their patients, who can find significant savings on interest compared with a regular credit card or installment loan as long as they pay the debt off before the deferred-interest period ends. To ensure customers understand how deferred interest works, the company said it calls cardholders after their first charge goes through and shows the date when interest will begin to accrue on invoices in a large red font. CareCredit also said it trains providers to educate patients about the card up front and works with cardholders who are having trouble making payments.

Only about 1% of CareCredit's purchase volume comes from healthcare providers and hospitals - in fact, CareCredit refers to its product as a "health and wellness" card. The remaining 99% includes dental work, veterinary services and retail items such as vitamins, fitness equipment and Sleep Number (SNBR) beds. The company did not provide details on how much users spend in each category.

Wells Fargo last year stopped offering its Health Advantage card, a financing option for vision, dental, audiology and veterinary services that was capped at a 12.99% interest rate.

"Health Advantage represented a small fraction of the overall private label credit card business and was not aligned with our long-term growth strategy," Wells Fargo said in a statement to MarketWatch. "We stopped accepting new customers for this product in September of 2024."

MW Medical credit cards offer a lifeline for cash-strapped patients. These 3 tips can help you avoid the pitfalls.

By Genna Contino

For patients bracing for tightened Medicaid and Medicare rules and loss of ACA subsidies, medical credit cards can be an alluring option

Medical credit cards can be used to pay for services provided by doctors, dentists and veterinarians and even for health and wellness items offered by specific retailers - but make sure you understand the card's deferred-interest terms before signing up.

When Texas resident Sandra Lynn needed multiple root canals that were not covered by insurance, she didn't want to drain her savings of nearly $5,000 to pay for them. Instead, the 62-year-old opened a medical credit card, a revolving line of consumer credit with deferred interest that was offered by her dentist.

Lynn put around $1,900 on the card to pay for the first root canal. But when she returned to the office to fix the remaining two teeth and tried to pay with the same card, she was told she had to pay off the balance first. The credit limit on the card couldn't be extended to cover both procedures - terms that weren't made clear to her when she applied for the card.

Lynn considers herself fortunate, she said, because she doesn't live paycheck to paycheck. She ultimately paid off the first procedure early so she could move forward with the second procedure, despite her original plan to spread out payments for both procedures over a year.

"I just wanted to use [the medical credit card] because, you know, you spend your savings on one thing, and then something else happens," Lynn said. "But I sat on it for about a month, and I said, 'I really need this done,' and I paid it off and I got the rest of the work done."

Medical credit cards, which can be used to pay bills ranging from $35 to $40,000, allow patients to finance services such as medical procedures, dental appointments or insurance copays with 0% interest for a limited period, typically six to 18 months.

But Lynn's experience highlights a hidden risk: Cardholders can incur significant unexpected costs if the terms aren't made clear up front. And those who don't pay off their balance before the deferred-interest period ends can find themselves drowning in unanticipated debt.

As consumers weather persistent medical inflation - the cost of medical-care services grew 4.2% year over year in August - more doctors, dentists and even veterinarians are offering this type of financing. A medical credit card transfers a patient's debt from the doctor's office to a bank, and the ensuing debt is classified as consumer debt - meaning the financial relationship is now between the patient and bank, rather than the patient and the hospital or doctor's office, said Patricia Kelmar, senior director of healthcare campaigns at the Public Interest Research Group.

There's no publicly available data tracking the usage of medical credit cards, but annual financial reports show that the number of active health and wellness accounts with Synchrony Financial (SYF), which offers the CareCredit card, jumped from 5.7 million to 7.7 million, a 35% increase, between 2021 and 2024.

Experts expect patients' reliance on medical credit cards to continue to rise along with the cost of healthcare. Changes to Medicaid and Medicare in the GOP's One Big Beautiful Bill Act that will tighten eligibility rules and add more verification requirements are expected to exacerbate this financial struggle, they add, especially if Congress does not extend an Affordable Care Act tax credit that helps lower insurance costs and that is set to expire at the end of the year.

Read more: Costs could soar next year for people with Obamacare. What you can do about it now.

"People are going to start to see really high premium increases that they're going to have to pay out of pocket if they can no longer count on these subsidies," said Mona Shah, senior director of policy and strategy at the health-advocacy nonprofit Community Catalyst. "We certainly see people being more attracted to these deferred-interest medical-payment products and credit cards in healthcare settings, which is just going to exacerbate the medical-debt crisis."

Why medical credit cards can be risky

Banks that offer medical credit cards sometimes partner with healthcare providers, which then offer the card as a payment option to patients, experts say. From the perspective of clinics that are flooded with insurance-claim denials and are waiting to get paid for services already provided, payment via a medical credit card covers those costs immediately without having to deal with the insurance bureaucracy - but it also passes the full financial burden on to the patient. Patients can also use these cards alongside their insurance to cover out-of-pocket costs.

See more: This little-noticed update to Medicaid rules could burden seniors with thousands in medical debt

Because of the implied trust between a patient and their doctor, many people accept the financial products offered without question, Kelmar said.

"It's irresponsible of the providers to be doing that, and it's predatory on the patient who is needing that care and knows what's standing between them and their doctor appointment is this easy way to pay the bill," she said.

Doctors, however, aren't always focused on the financial side of their practice, said Imamu Tomlinson, the CEO of Vituity, a physician-led medical staffing agency. A credit card can seem like an easy solution for providers whose patients can't afford to pay for their care up front, he added.

"Most providers and health systems have such low operating margins that in many cases, [patient] financing might be the only option," said Tomlinson, a practicing emergency physician in California. "Providers are finding any way they can to support patients and remain financially solvent - which is even tougher in an environment with Medicaid and Medicare cuts."

After the zero-interest promotional period ends, interest rates on medical credit cards can be as high as 32.99%, according to Shah. And if the balance isn't paid off in time, these cards often retroactively charge interest accrued since the purchase date, leaving patients feeling blindsided by the high cost.

See more: U.S. interest rates are way too high, Fed's Miran says, and rising layoffs and unemployment could be the result

"If you're unable to pay off the debt ... that will impact your credit score and impact people's abilities to rent, purchase cars, secure loans," Shah said.

"The choice is ultimately the consumer's," CareCredit said in a written response to questions from MarketWatch. "Restricting access to credit to pay for health and wellness care means fewer people will get the care they want when they want it."

Consumer advocates like PIRG and Community Catalyst, however, want medical credit cards to be banned at doctor's offices to spare patients who are already dealing with health issues from what advocates call predatory lending practices. But experts say it's an uphill battle, and the rising popularity of medical credit cards is symbolic of an increasingly unaffordable American healthcare system.

Medical credit cards are "symptoms of a bigger problem," said Gary Jacobs, executive director of government relations and public policy at the healthcare company VillageMD. "This is a short-term solution to a politically created problem."

Card issuers say medical credit cards can offer significant savings on interest

Some users of medical credit-cards have filed for bankruptcy. A 2019 analysis of Oregon bankruptcy filings found that CareCredit was the most frequently listed medical-debt holder and had the highest median debt per bankruptcy filer, even when compared with healthcare systems in the state. While purchases on CareCredit cards are technically consumer debt, the analysis grouped the lender under medical debt due to the nature of purchases made on the card.

CareCredit said it did not have access to up-to-date Oregon bankruptcy filing data but that the "vast majority" of its cardholders are prime or superprime borrowers, meaning they have good credit and are at low risk of default. Nearly 80% of its customers pay off the card before any interest is charged, the company added.

Synchrony Financial's CareCredit was listed in a 2023 Consumer Financial Protection Bureau report as one of the three main financial institutions offering medical credit cards, along with Wells Fargo (WFC) and Comenity, a subsidiary of Bread Financial (BFH).

CareCredit says providers pay for the ability to offer the card to their patients, who can find significant savings on interest compared with a regular credit card or installment loan as long as they pay the debt off before the deferred-interest period ends. To ensure customers understand how deferred interest works, the company said it calls cardholders after their first charge goes through and shows the date when interest will begin to accrue on invoices in a large red font. CareCredit also said it trains providers to educate patients about the card up front and works with cardholders who are having trouble making payments.

Only about 1% of CareCredit's purchase volume comes from healthcare providers and hospitals - in fact, CareCredit refers to its product as a "health and wellness" card. The remaining 99% includes dental work, veterinary services and retail items such as vitamins, fitness equipment and Sleep Number (SNBR) beds. The company did not provide details on how much users spend in each category.

Wells Fargo last year stopped offering its Health Advantage card, a financing option for vision, dental, audiology and veterinary services that was capped at a 12.99% interest rate.

"Health Advantage represented a small fraction of the overall private label credit card business and was not aligned with our long-term growth strategy," Wells Fargo said in a statement to MarketWatch. "We stopped accepting new customers for this product in September of 2024."

(MORE TO FOLLOW) Dow Jones Newswires

September 25, 2025 12:33 ET (16:33 GMT)

MW Medical credit cards offer a lifeline for -2-

Bread Financial did not respond to MarketWatch's request for comment about Alphaeon, its medical credit card offered by Comenity.

3 questions to ask yourself before using a medical credit card

Can I pay this off before the deferred-interest promotional period ends?

This is arguably the most important question. Medical credit cards really only offer significant savings if you can pay off the balance before interest charges start. If you can't pay it off before that time period ends, experts say, it's smart to seek out a different way to finance the cost.

Are there any mistakes on my bill?

The transfer of your debt from the doctor's office to a bank means the provider is removed from any future billing disputes, which can make it difficult to negotiate payment terms or correct errors. So before agreeing to use a medical credit card, make sure your bill is accurate.

What other financing options do I have?

Before resorting to a medical credit card, ask the provider for financial assistance or a direct payment plan, experts say. Financial-assistance forms can be daunting, Kelmar said, but nonprofits like Dollar For exist to help people apply for discounts and debt forgiveness from hospitals.

Negotiating can be a helpful tool to bring costs down as well. Look for the Medicare rate, or the amount that Medicare reimburses providers for specific services, Kelmar suggests, and ask your provider if you can pay the lower rate. It's not guaranteed that your doctor will agree, but you won't know unless you ask.

"If you are having to pay cash or you're feeling like you need a credit card, ask them what they can do to bring down that price," she said.

Community Catalyst and PIRG partnered to create a guide to understanding medical bills that has useful information about patient rights, insurance and financing.

What personal-finance issues would you like to see covered in MarketWatch? We would like to hear from readers about their financial decisions and money-related questions. You can fill out this form or write to us at readerstories@marketwatch.com. A reporter may be in touch to learn more. MarketWatch will not attribute your answers to you by name without your permission.

-Genna Contino

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

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September 25, 2025 12:33 ET (16:33 GMT)

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