A trip to the dentist's or doctor's office can be pricey.
Should you put the bill on your favorite rewards credit card? Here are some things to consider before pulling out your card.
You've already got a rewards card
There is a good chance you are carrying a rewards credit card in your wallet. According to a 2012 Consumer Survey from The Policy and Economic Research Council, 79 percent of credit card holding consumers are members of credit card rewards programs. And rewards credit cards are not just for the rich. Among consumers earning less than $20,000 in annual income, 7 out of 10 carry a rewards credit card.
Most reward credit card offers will allow you to earn rewards points or miles for medical or dental expenses. Be sure to check the details of your rewards program to make sure medical or dental expenses are included.
Get big rewards for big bills
The costs of medical procedures are all over the map, as a database released by the Centers for Medicare and Medicaid Services reveals. And you might as well get something back for the pain of a big medical bill or a higher-than-expected dental bill.
Charging a medical bill on a rewards card could earn you a nice stash of rewards points that you could use on travel, entertainment, clothes, home goods or whatever your rewards program offers.
If you are a new rewards card customer, charging a big medical or dental bill may qualify you for some serious bonus rewards.
For example, with some good rewards cards if you charge a specified dollar amount in the first three months of opening the account, you can earn significant bonus points. With the offers available as of today, if you have excellent credit you can signup for a card with bonus points worth up to $500 in travel awards. So a medical or dental bill could help pay the airfare for your next vacation.
Get a discount
Choosing to pay for a medical bill or dental bill with a rewards credit card could earn you a discount on the total cost of a bill.
Medical providers like to get paid promptly and the billing office may give you a discount if you offer to pay for a big bill in full today using a rewards credit card. So be sure to ask for a discount when you offer to pay a bill with a rewards card.
Costly if you carry a balance
How long will it take you to pay off the balance on a rewards card for a medical or dental bill? What kind of APR will you be paying on the balance? Be sure to estimate the costs of carrying a balance on a rewards credit card before you agree to swipe a big medical or dental expense.
According to a 2013 study from NerdWallet, more than 11 million American adults (ages 19 to 64) will take on credit card debt to pay off their hospital bills.
Using rewards cards to pay for medical and other bills makes the most sense for consumers with good credit who are able to pay their credit cards in full every month.
If it takes more than three to six months to pay off the bill, it may make more sense to use a credit card with a lower annual percentage to foot a medical bill.
Payment plans are cheaper
The most cost-effective way to pay for a big medical bill is to work out an interest-free payment plan with the billing office of your medical provider. So be sure to ask about payment-plan options. You may be able to pay off a big medical or dental bill with a couple of years of affordable monthly payments without paying a penny of interest.
It is important to mention another option you might hear about the next time you’re facing a hospital bill – medical credit cards. While these cards might seem like a great option when facing large balances, these cards are known for carrying high interest rates that will make it even harder for someone with limited finances to pay off their balance.
Not worth strain on your credit
About 1.7 million Americans live in households that will declare bankruptcy due to their inability to pay their medical bills, according to a 2013 study from NerdWallet.
There is no point in risking dire financial straits to earn some extra bonus points on a rewards credit card. If charging a medical bill is going to put a huge strain on your credit, it's better to work out the most affordable payment agreement with a medical provider that you can. Avoiding paying finance charges on medical bills will save you money in the long run.