Medical credit cards are often regarded as a godsend gift by cash strapped individuals, without medical insurance, hit by medical emergency. Scores of Americans have found themselves in a stressful situation during health related emergencies. The credit card companies have recognized this opportunity to step up their own business by offering medical cards which offer similar benefits as that of regular credit cards, only with the exception that these plastics are meant to help you deal with your medical expenses.
If you are really willing to beef up the personal finance tips that you are already aware of, then you should educate yourself about the medical cards and the way they function. So, let’s start:
How do these cards work?
These cards generally have a 24 month free interest period, which makes them one of the most impressive financial attributes around. In most of the cases, the patient (who wants this card) works on the repayment plan of the card with her/his medical practitioner, and if the latter agrees that the treatment payments would exceed a period of 2 years, then the card company will charge around 15% interest when the first 24 months are over. The repayment terms, however, are very stringent. However, they won’t really require you to provide a spotless credit history in order to qualify for the cards. Without a great credit, you might as well be asked to pay higher rate of interest than would have the case otherwise.
What do the experts suggest?
Despite the impressive sign up offers and the long interest free period, financial experts advise against viewing these cards as viable financing options in times of crisis. The simple reason behind that – is the exorbitant rate of interest attached. They opine that patients should rather seek discounts on the medical bills. If all your negotiations fail, it’s still better to turn to regular cards.
The strict repayment option: Watch Out!
No matter, how fantastic that free interest period sounds, these plastics are associated with very strict repayment conditions. One of the major reasons why these cards have drawn flak is the way the interest works here. Even a single default can lead to high rates of interest kicking in, even if you are in your interest free period. And not to forget! The rate will be charged on the whole balance, not on the monthly payment. Most of these providers are generally very obstinate when it comes to negotiations. You can hardly find any luck on your request for some discounts on the repayment. Enter an agreement, only after learning about this.
It is important for you to educate yourself about other such (as the ones mentioned above) aspects of these cards. Remember, that nothing can replace a proper health care or medical insurance policy. It is your primary responsibility to seek a medical insurance cover (that is sufficient to fund major illnesses), once you become eligible for the same. There are valid reasons as to why experts advise against securing these cards. And those reasons have been thoroughly mentioned above.