CHARLOTTE, N.C. -- According to a 2019 CompareCards survey, one in three cardholders are in credit card debt due to medical bills. Of those who paid a medical bill with their credit card, almost 10% owe at least $10,000. The survey also shows that almost 60% of those surveyed felt they wouldn't have been able to afford their medical expenses.
And with average credit card APRs for current card accounts hovering around the 15% mark (and far higher for new card offers at more than 20%), those figures can spell serious financial trouble for those who find themselves struggling to pay off their revolving balance — or simply keeping up with the accrual of compounding interest.
- A third of cardholders are in credit card debt due to medical bills. Of those who paid a medical bill with a credit card, nearly one in 10 owe at least $10,000.
- 56% of credit cardholders have paid a medical bill with a credit card at some point in the past, and more than half are still in debt because of that decision.
- Almost 60% of those who used a credit card for a medical bill said they would not have been able to afford the bill otherwise. However, about the same percentage said they used plastic to earn credit card rewards.
- About 30% of respondents say they regret using their credit card to pay medical bills.
- The data suggests about 18% of cardholders have a medical credit card, including more than a quarter of millennials.
A third of cardholders are in credit card debt due to medical bills
Given the high cost of medical care in America and the unpredictable nature of medical emergencies, it's perhaps unsurprising that so many of the survey respondents said they'd paid a medical bill with a credit card at some point during their lives. But more troubling, a majority of those cardholders say they're still feeling the repercussions of this choice — which many of them felt was not a choice at all.
56% of credit cardholders have paid a medical bill with a credit card at some point in the past, and more than half are still in debt because of that decision
- Men (60%) were more likely to have paid a medical bill with a credit card than women (52%).
- Low-income cardholders are more likely to have done so than higher earners.
Nearly 6 in 10 thought they had no other option
Almost 60% of the surveyed respondents felt they wouldn't have been able to afford their medical expenses without turning to credit cards. This was especially true for lower-income respondents, as well as millennials, of whom 76% said they had no other way to foot the bill.
About 30% of respondents say they regret using their credit card to pay medical bills
Of the 56% of surveyed cardholders who had put a medical bill on plastic, more than half are still in debt because of that decision. What's more, about a third of respondents admitted they regretted paying their medical bills with a credit card.
18% of cardholders have a medical credit card, including more than a quarter of millennials
Nearly 20% of surveyed cardholders said they had a medical credit card — and given how frequently these cards offer deferred interest or low promotional APRs, they're an understandably attractive option.
How to avoid taking on high-interest medical debt
For medical expenses you may face in the future:
- Talk to and negotiate with your providers. Even if they don't advertise an interest-free payment plan, one may be available, and the money you could save makes it well worth opening a dialogue.
- Consider a medical loan or unsecured personal loan instead of relying on credit. Depending on your creditworthiness and the credit card in question, a loan may carry a lower interest rate and help you save money over time.
- If you do pay with credit — particularly a medical credit card — be absolutely certain you understand the terms of the agreement and make a sustained effort to pay on time so you won't end up with a sky-high interest bill after the deferral period is up. Not all credit cards are created equally for emergency expenses, so try to take the time to shop around if you can.
For medical expenses you've already paid for with a credit card:
- It might sound counterintuitive, but you may be able to save money on interest by opening another credit card and initiating a 0% balance transfer deal. This tactic will buy you more time to pay down the existing balance without accruing any more compound interest.
- You might also consider paying off your medically related credit card debt with a personal loan, which, again, may carry a lower interest rate.
- It's also worth contacting your card issuer and asking for a lower APR. One CompareCards study found that approximately 80% of cardholders who did so were successful, though only one in five actually asked. All it takes is a phone call — and even the most frustrating phone tree in the world is worth going through if it saves you hundreds or thousands of dollars.