The average American spent $456 per month just on health insurance in 2020. With medical costs continuing to rise, you want to give your patients flexibility in how they pay for your services. One way is by accepting credit card payments. 

A medical credit card is a type of credit card offered by practices to help patients pay for health care expenses. If you’re a medical provider or a health-centered business, you may find yourself wondering whether you should offer or accept these cards as forms of payment.

Below, we’ll explain what medical credit cards are and why they may not be your best option. We’ll also introduce you to a better credit card processing solution.

What Is a Medical Credit Card? 

A medical credit card is a lending option designed to help cardholders pay for medical procedures and services. These cards offer promotional periods and special financing options to cardholders — such as payment plans with deferred interest charges, 0% intro APRs, or low interest rates — so cardholders don’t have to pay the entire balance of their medical bill at once. 

Medical credit cards are similar to regular credit cards. Prospective cardholders have to apply and have a good credit score (a minimum FICO score of 670). However, medical credit cards typically don’t offer perks to cardholders like cash back or travel rewards. 

There are two primary medical credit card issuers: 

  1. CareCredit
  2. Wells Fargo Health Advantage Card 

As a health care provider, you have to sign up with these credit card issuers to be able to accept their credit card. However, before you decide to sign up, it’s best to consider the whole picture.

The Problems With Medical Credit Cards

A patient signs up for a medical credit card

Medical credit cards may seem like an easy way for your business to get paid for the services you provide. But there are some disadvantages that are worth considering when determining whether to accept these forms of payment. 

Not Widely Used 

The biggest problem with medical credit cards is that they are not widely used. As we mentioned previously, there are only two options available, CareCredit and the Wells Fargo Health Advantage card. They are not as well-known or accepted as your standard Visa, Mastercard, Discover, or American Express cards. 

Also, if you already accept credit cards for payment,  you can’t process medical credit cards through your regular point-of-sale system. The medical credit card company provides you with a special portal that is to be used only with their cards. This means your office staff would have to learn yet another system rather than using one payment processor for all transactions.

Patient Sign-Up Needed

Since these cards aren’t widely used, it’s likely your patients will need to sign up and receive approval for the card. When you decide to accept a medical credit card, you’re encouraged to sign up your patients at your practice. Your office staff is already busy, so making sales pitches and getting patients approved for a credit card is just one more thing to add to their plate.

You’re looking for solutions to make your practice run more smoothly, not ones that will give you more work to do.

In addition to the extra work for you, your patients may not like hearing a sales pitch when they are trying to pay their bill or schedule a procedure. Plus, your patients may not be interested in adding another credit card to their wallet, especially one with such limited usability.

You’re likely better off sticking with payment options that patients already know and are comfortable with. 

Not All Procedures Are Covered 

Another disadvantage to medical credit cards is that not all procedures are covered. For instance, the Wells Fargo card is only available for: 

  • Dentistry practices
  • Audiologists 
  • Optometrists 
  • Veterinarians 

CareCredit covers many cosmetic surgeries and procedures like Lasik. But it does not cover all emergency procedures. So, there’s a chance that the lender will not cover all of the procedures that your practice offers.

Processing Fees

When a patient uses a medical credit card to pay their bill, your medical practice will be charged a processing fee. These fees cut into your bottom line. 

For example, let’s say that a procedure costs $10,000, and the medical credit card company charges a 3.5% processing fee. That means you owe $350. This processing fee equals less revenue in your pocket, as you’re now only making $9,650 on that procedure.

The Best Alternative: A Surcharge Program 

Medical credit cards can be more trouble than they’re worth. Accepting regular credit cards will be more popular and convenient for your patients. Over 191 million Americans have a credit card, making it a far more widespread and available payment option. 

The one downside to accepting regular credit cards is that you’ll still be on the hook for processing fees. That is, of course, unless you use a surcharge program — the cheapest way to accept credit card payments

With a surcharge program, if your patient chooses to pay with a credit card, they are responsible for covering the cost of the processing fees. The patient is simply paying for the convenience of using a credit card.

This gives your practice a revenue boost, allowing you to keep every penny for your services.

With a surcharge program, a patient has two options: 

  1. They can pay with a credit card and accept the extra fee, which is 3.5% of the transaction. Remember the example that we cited earlier, where you only got to keep $9,650 out of a $10,000 bill? With this option, you would get the full $10,000, and the patient would pay a total of $10,350 for the medical procedure. 
  2. They can pay upfront with a debit card or cash, avoiding the processing fee altogether. 

When you use Nadapayments for your credit card processing, your surcharge program will be built right in. We’ll even make set up a breeze and provide you with the necessary signage to keep your customers informed.

Plus, with Nadapayments, you can swipe credit cards in-person or accept online payments, giving you and your patients even more flexibility. 

Are Medical Credit Card Payments Right for Your Practice? 

A patient pays with a credit card at a doctor's office

With increasing medical expenses, patients are continually looking for new ways to pay for procedures. As a health care provider, it makes sense that you would want to offer as many payment options as possible. 

However, one option that you may want to avoid is medical credit cards. Simply put, there are too many stipulations attached to these cards, especially when there are more straightforward and revenue-friendly options available. 

Instead, accepting regular credit cards and using a surcharge program is a win-win for your patients and your business. Your patients are likely already using credit cards, so they don’t need to sign up for something new. And so long as you use Nadapayments for credit card processing, you’ll keep up to 4% of every transaction, boosting your revenue. Plus, you never have to worry about hidden costs or set up fees.

If you’re ready to add money back to your bottom line, get in touch with us today.