Should You Put Medical Bills on a Credit Card? Here's How to Decide

Credit cards are a particularly useful modern invention -- you can pay for purchases securely and earn rewards or cash back on your regular spending in the process. And in many cases, you can use your credit cards for expenses beyond just buying groceries or shopping online.

Personally, I've been using mine to pay medical bills as of late -- and no, I don't mean I'm using a medical credit card. Those are different! Instead, I've been paying for lab tests and copays with my favorite rewards cards. But is this a good idea? Let's take a look at the pros and cons, so you can make the right decision for you and your personal finances.

Pros for using a credit card for medical bills

There are a couple of good reasons you might consider putting an insurance copay or your portion of a bigger medical bill on a credit card. The first is that doing so could help you reach your minimum spend for a generous welcome bonus on a new card. This is especially effective if you have a large medical bill, like a dental procedure that your insurance doesn't cover in full, or a new pair of eyeglasses with all the bells and whistles.

If you're not working toward a welcome bonus, but instead have a credit card with a 0% APR offer for a long period, using it for a big medical bill could also be a smart move. If you've got 10 months left on your 0% offer, and need to pay a bill of $800, you can effectively finance that bill over the 10 months and not have to shell out $800 all at once OR pay interest on your bill. Just be sure you can afford to pay the bill off in full before your card's go-to APR kicks in, or you will have to pay interest.

You might think this is the same as getting a special medical credit card and using that instead. But as a point of distinction, some medical credit cards don't have 0% APR offers -- they have deferred-interest offers instead. This is different, and if you're not careful to pay the charge off before the offer ends, you'll end up owing interest on your entire bill, even if you've only got $50 or $100 left to pay on the original amount.

Cons for using a credit card for medical bills

There are a few reasons to think twice before using your credit card to cover a medical bill. Medical debt is treated differently when it comes to your credit report and consequently, your credit score. There have been recent changes to how medical debt is reported on your credit score, and this is a significant win for the many Americans who face financial hardship because of medical expenses.

In 2021, 43 million of us had allegedly unpaid medical bills on our credit reports, according to the Consumer Financial Protection Bureau (CFPB). But as of April 2023, all collections activity on medical bills coming to less than $500 was supposed to have been removed from credit reports, automatically boosting the credit scores of many Americans. And in July 2022, all paid off medical debts that were sent to collections were supposed to be removed from credit reports, too.

All of this is to say that if you are struggling with medical bills, putting them on your credit card could be a dangerous move. I am very fortunate to be able to put a medical bill on mine, collect the rewards points, then turn around and pay it off. If you know you'll have to carry that debt forward and could have a problem paying it off, don't use your credit card for it -- because if you do, it could negatively impact your credit score. Instead, consider an alternative way to pay.

Is there a better way to pay that bill?

If you are on shaky financial ground, you likely have options to pay medical bills that don't involve swiping your favorite credit card. For starters, go through the bill with a fine-toothed comb and ensure your insurance actually paid as much of it as it was supposed to -- billing errors are common. Then, give your doctor's office or hospital a call, and ask to speak to the billing department. You're allowed to negotiate medical bills, and if nothing can be done to reduce the amount you owe, you can get on a payment plan. You might also qualify for financial assistance, depending on your income and other circumstances.

And finally, a personal loan could be a cheaper way to finance a medical bill over a longer period -- the best personal loans have lower APRs than many credit cards, and if you have a good credit score, you might qualify for a decent rate.

Owing money for medical care and being unable to afford those payments is scary -- believe me, I know. Your credit card is great for many things, but depending on your own finances, it may not be the best payment method for medical bills. Consider all the angles discussed above before you swipe.