Here's Why You Should Never Put Medical Bills on a Credit Card

Medical bills are an expense many of us have to deal with. And they have the potential to be exorbitant, even if you have health insurance.

If you owe money in medical bill form, you may be inclined to charge those expenses on a credit card and pay it off when you can. But putting medical bills on a credit card can be a terrible idea.

You might pay more interest

Credit cards are notorious for charging large amounts of interest. And it's not as if your credit card company will give you a break on your interest rate because you're paying for a doctor visit, as opposed to concert tickets.

On the other hand, many medical providers understand that patients can't pay off their bills in one fell swoop. So often, they offer affordable payment plans that have you paying little interest, or even no interest at all. Before you charge medical bills on a credit card, look into the options offered by your providers since they're likely to be more cost-effective.

You might lose certain protections

Unpaid debts have the potential to damage your credit score. But there are new rules in place designed to protect consumers from credit score damage due to medical debt.

The three major credit bureaus -- TransUnion, Experian, and Equifax -- all impose a 365-day waiting period before delinquent medical bills can appear as part of your credit history. This gives you time to sort out billing errors and get current on your medical bills.

Sometimes, patients get medical bills because their insurers deny their claims erroneously. This new waiting period gives you time to appeal a claims denial before unpaid medical bills show up on your credit report.

What's more, if you owe less than $500 in medical debt, even if it's way past due, it won't appear on your credit reports. But if you charge your medical expenses on a credit card and then let that bill become delinquent, you'll give up that protection. And your late or delinquent credit card balance will show up as a black mark on your credit report.

Be careful when putting medical bills on a credit card

There's really only one scenario where it's OK to put medical bills on a credit card, and it's when you're certain you can pay off your balance in full by the time it comes due. In that case, charging those expenses could make it possible to earn cash back or reward points.

But otherwise, you're generally better off paying your medical bills directly through your providers. Even if you're not offered an affordable payment plan and fall delinquent, you still get the benefit of the protections outlined above, which give you more time to pay and settle your bills before your credit score is impacted.

That said, before you fork over money for any medical bill, read it thoroughly. If the amount seems off -- say, you normally have a much lower copay or coinsurance rate -- dive in. Contact your provider to make sure they used the right billing codes and submitted a claim to your insurer correctly, and then follow up with your insurance company to see what's what. It would be a shame to go into debt over a sum of money you're not even responsible for.