What to know before using CareCredit

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It may not have been reviewed, approved or otherwise endorsed by the credit card issuer.

As healthcare costs and insurance premiums continue to rise, consumers are looking for ways to pay for the high price of the treatment they need.   Many consumers choose to use credit cards like CareCredit to help them pay for large healthcare expenses over time.  But before you sign up for CareCredit to pay for your next big healthcare bill, you should be aware of a few things first.

26.99% Interest Rate
Special financing offers like 0% interest for 6 to 24 months on qualifying purchases is what draws most people to the CareCredit program.   The idea of paying for large expenses over time with 0% is very appealing.  Just remember there is one big caveat that you should understand before getting started— deferred interest.  If you aren’t able to pay off your balance within the promotional period, you will be charged a retroactive interest rate at an APR of 26.99%.   This is something that many customers will easily forget and the minimum payment shown on your statement wont help you avoid this high rate.  Be absolutely sure that you can pay off your balance within the promotional period, and do the math yourself on exactly how much you need to pay each month to avoid the high interest penalty.

Bad reviews
Even if you are careful and make all your payments on time, unfortunately there are hundreds of negative reviews online that explain how a large company like CareCredit can make mistakes and make your life miserable. I wont go into detail here, but know that the average star rating for CareCredit is 1.5 stars out of 131 reviews on Yelp and 1.34 out of 502 reviews on SiteJabber.  CareCredit does have a 3.5 star average out of 191 reviews on WalletHub, but the same theme persists throughout, poor customer service with unexpected fees. 

Not all providers accept care credit
You may have wondered why all doctors and dentists dont accept CareCredit if it is just a credit card designed for healthcare.  Well here is the worst part, on top of the fees and high interest rates CareCredit collects from you, they also take some money from the healthcare providers as well, up to 8% of your total procedure cost.  But think again if you believe the doctors and dentists just give away 8% to a credit card company; most healthcare providers will increase the price of your procedure to cover their cost with CareCredit.  Ultimately the price of your healthcare is artificially inflated because of CareCredits arrangement with the provider.

A friendly alternative to CareCredit
Insurance Savings Group offers a great alternative to CareCredit. The Savings Group also allows people to pay for large healthcare expenses over time... but our program works through payroll deduction, and there are no interest charges, so you dont ever have to worry about late payments or penalties.  Because we dont charge interest, but instead collect a fee from your employer, our fixed monthly payments are lower than a typical CareCredit program.  Talk to your employer about offering the Savings Group to your employee benefit package at your next open enrollment.