Offered a Medical Credit Card? Read the Terms Before Signing

Check the bill before signing anything

Before you commit to any financing, confirm that what you owe is correct and that lower-cost options are not still open to you. It is worth asking whether a discount is available for a lump-sum payment or a lower balance, and whether the account can be placed on hold while the bill is reviewed. Work through the following checks:

• Ask for an itemized bill.
• Compare the bill to your explanation of benefits (the summary your insurer sends showing what it paid and what it left to you).
• Check whether the provider used the correct insurance information.
• Ask whether financial assistance is available.

Read the payment terms line by line

Payment terms can include interest, late fees, and deferred interest (interest that is charged retroactively if you do not pay the full balance in time), along with language about transferring the account, sending it to collections, and reporting it to the credit bureaus. Read the whole agreement before you sign it, and ask for a copy by email or mail so you can review it rather than agreeing on the phone.

Questions to ask

Start by asking the one question that shapes everything else: is this a provider payment plan, a medical credit card, or a medical loan? The answer tells you who will hold the balance and which terms apply.

Who will own the account after I sign?

Some medical credit cards advertise a promotional period, and this is where deferred interest matters. If you do not pay the full amount within that period, interest can be added back on top, so the amount you owe can grow even though you made your payments. Ask the company to tell you plainly whether interest is waived (dropped for good) or only deferred (held back and charged later if you fall short), because those are different terms.

Keep in mind that you may qualify for hospital financial assistance or a provider discount, so ask about those options before you move the balance onto a credit card, a loan, or a third-party payment product. If an application is available, ask whether the account can be paused while it is reviewed. Before you agree, run through these questions:

• Can I apply for financial assistance before I finance the balance?
• Is there interest?
• Is there deferred interest if the balance is not paid by a certain date?
• Are there late fees?
• Will missed payments be sent to collections?
• Will this be reported to a credit bureau?
• Can the balance still be corrected if the bill is later found to be wrong?

Keep a record of the offer

Putting your questions in writing before you agree can slow the process down enough to let you verify the balance and the terms, so ask for the itemized bill, the assistance application, the payment agreement, and the written hold request, and keep them together in the same file. When an offer is made, write down the following details:

• Name of the provider or financing company.
• Account number.
• Total balance.
• Monthly payment amount.
• Interest rate or promotional terms.
• Late fee terms.
• Credit reporting language.
• Collection language.
• Representative name and date of call.