No one wants to deal with an unexpected medical expense. But this is an unfortunate part of life many people have to experience each year. Putting those costs on a credit card might seem like the only option.
But should you put medical bills on your credit card?
What Are the Dangers of Overusing Credit Cards?
Credit cards can be dangerous for a few reasons. People often don’t recognize the problem with putting too much on their credit cards until they’ve gone too far.
One of the biggest reasons credit cards can be a danger to consumers is the spending doesn’t feel real at the time. You just swipe a piece of plastic and get the thing you need.
But the spending itself isn’t necessarily the biggest issue with credit cards —especially if you’re using them for a necessity. The interest payments are the true culprit, as that’s what leads to ballooning the amount you owe over time.
Say you need to put an unexpected medical expense that costs $5,000. While this seems like a big number, it’s well within the range of unexpected costs. The average emergency room visit cost $1,389 in 2017, but this number is on the rise year over year. Depending on the nature of your emergency, you could be facing a bill well over that figure.
That would be a huge expense for the average person and might require debt in order to make the upfront payment if insurance won’t cover it. Without interest, it’s feasible to pay that off over a course of a few years without having to make substantial lifestyle changes.
However, putting that expense on a credit card means the balance will continue growing even as you pay it down. This creates an added financial strain that will require far more money to pay off than the original amount.
How Can You Prepare for Unexpected Medical Expenses?
It’s always advised that people should expect the unexpected in life. That’s a lot easier said than done. It’s especially hard to prepare for a financial need because you need to be making enough money to either afford comprehensive insurance, or have some money socked away for a rainy day.
If neither of these is true for you, it’s a good idea to try creating an emergency savings account. You’re probably thinking you’re already hard-pressed for money. You don’t have any more to dedicate to things that may or may not happen.
However, as noted in the previous section, the ramifications of not having any emergency savings means you’ll need to use credit cards to pay for expenses. This can put you in a serious bind.
Putting away a few dollars per month into a dedicated emergency fund — say 25 or 50 dollars — can make a huge difference over time. No one wants to make sacrifices, especially if their financial situation is already lean. Creating that cushion, however, can be a lifesaver down the line.
What to Do If You Have Too Much Debt
People who already have significant debt might wonder what they can do in their current situations. Those who don’t think they can figure out a way to overcome the debt on their own should consider talking to a debt relief organization.
Companies such as Freedom Debt Relief have helped many people regain control of their finances, even if they’re struggling with a lot of debt. They offer debt settlement and debt consolidation programs for people who need help to get their finances back on track.
When you participate in a debt relief plan, you’re getting experts on your side who have worked with many other people in a similar situation to yours. Qualified enrollees will either get better terms for their current loans, or be able to get a consolidated loan from the debt relief agency. Some people are even able to eliminate their debt in 24-48 months when using these plans.
Your health is a kind of wealth. Keeping yourself healthy is of the utmost importance. But don’t let unforeseen medical expenses derail your financial health.