CareCredit/Health Care Financing

[aresay]

Does anyone have any experience with CareCredit?

By way of background, I am considering LASIK eye surgery, which is not covered by my health insurance. The procedure is estimated to cost a couple thousand dollars, which I do not want to pay all at once. The LASIK office offers the option of making installment payments, but only by using a company called CareCredit. My understanding is that CareCredit is basically just a credit card that comes with a 0% interest introductory rate for the first two years. The idea is that the company uses the credit card to pay the full price of the procedure and then you pay them back, hopefully before the introductory rate expires.

With that in mind, won't using CareCredit have a negative effect on my credit as I will essentially be carrying a balance every month (which I never do) until it is paid off? The other option is to pay everything up front, which would require dipping into savings.

 

[Alex1432]

Yes your analysis is correct it's just a credit card with an intro rate of zero. It certainly a hot to credit but it may depends on other variables.

Does your job offer fsa plan that is a good way to pay for it tax free.

 

[Jus]

Yea, you're better off putting it off on a credit card that you have maybe if it has an intro 0% apr still or HSA if you have one. Alliant CU offers an HSA that you can create as well if your employer doesnt have one. It's an interest earning FSA as well.

 

[Matt]

Alliant CU offers an HSA that you can create as well if your employer doesnt have one. It's an interest earning FSA as well.

There's a lot going on in that statement!

HSA is tied to a HDHP, so you can only create one if your employer offers a HDHP, or if they offer no health plan and you go on the exchange. You can't just open a HSA.. it needs to piggy back. Your employer would be very unusual to offer a HDHP option without electing a HSA provider.

FSA don't really earn interest, as they are by nature to be quickly consumed, back in the day you had to spend it by 12/31 or lose all funds inside it, now it is extended into the next year, to help stop people losing cash, but it is designed to just cover your expected health needs for the year.

 

[Jus]

There's a lot going on in that statement!

HSA is tied to a HDHP, so you can only create one if your employer offers a HDHP, or if they offer no health plan and you go on the exchange. You can't just open a HSA.. it needs to piggy back. Your employer would be very unusual to offer a HDHP option without electing a HSA provider.

FSA don't really earn interest, as they are by nature to be quickly consumed, back in the day you had to spend it by 12/31 or lose all funds inside it, now it is extended into the next year, to help stop people losing cash, but it is designed to just cover your expected health needs for the year.

Yea I know but take a look at this and tell me what you think. Maybe I'm reading it wrong, but it sure sounds like a HSA without employer run thing.

http://www.alliantcreditunion.org/bank/health-savings-account

Edit: Re read my statement, meant to say HSA not FSA

 

[Matt]

Yea I know but take a look at this and tell me what you think. Maybe I'm reading it wrong, but it sure sounds like a HSA without employer run thing.

http://www.alliantcreditunion.org/bank/health-savings-account

Edit: Re read my statement, meant to say HSA not FSA

You can host a HSA in a number of places, but it isn't allowed without the underlying HDHP. So this is a legit place to locate your HSA, but you can't just open it up if your employer is offering you a non qualified health plan, such as a PPO/EPO type gig.

FWIW, if you go HSA route, you probably want it somewhere that you can invest - when done right it's basically a souped up Traditional IRA.

 

[Gloobnib]

Does anyone have any experience with CareCredit?

By way of background, I am considering LASIK eye surgery, which is not covered by my health insurance. The procedure is estimated to cost a couple thousand dollars, which I do not want to pay all at once. The LASIK office offers the option of making installment payments, but only by using a company called CareCredit. My understanding is that CareCredit is basically just a credit card that comes with a 0% interest introductory rate for the first two years. The idea is that the company uses the credit card to pay the full price of the procedure and then you pay them back, hopefully before the introductory rate expires.

With that in mind, won't using CareCredit have a negative effect on my credit as I will essentially be carrying a balance every month (which I never do) until it is paid off? The other option is to pay everything up front, which would require dipping into savings.

I was in the same boat (buying $7K+ of hearing aids) and I personally chose to use Care Credit. Others will probably disagree with my decision, but here was my reasoning:

• Interest free loan for (in my case) 18 months.
• Doesn't tie up my emergency fund
• Yes, it is a hard pull, but I 'only' average 6 of those a year anyway. I've never been turned down for too many pulls.
• Yes it lowers my average age of accounts (just as any new CC would).
• I'm not tying up credit line with any of the 'real' CC issuers, so they are more likely to keep approving me for more signup bonuses.

If you go this route, my personal recommendation is to 2x or 3x the credit line you ask for. If your Lasik is going to cost $2.5K, when you fill out the application, ask for $11.5K (or something like that). If asked, say you have a number of healthcare items (hearing aides?) where the provider also 'recommended' Care Credit. That way your utilization ratio on that card will stay <25%.

*For me*, opening the CareCredit account dinged my real FICOs by about 10 points in the first month, and it swiftly recovered to about a 2-3 point loss over the next 2 months.

Oh, and if you didn't already know, Care Credit is issued from Synchrony Bank.

ETA: But for the love of all that is holy, make sure you setup automatic monthly minimum payments and pay the whole thing off by the time your 0% rate expires. Otherwise you will be paying an extortionate interest rate *on the entire balance for the entire length of the loan*.

 

[Gloobnib]

Does anyone have any experience with CareCredit?

By way of background, I am considering LASIK eye surgery, which is not covered by my health insurance.

One other recommendation. I too had LASIK last December. Be sure to check with your employer's Health Insurance and/or with your Vision Insurance plan (if you have one). While they don't *cover* LASIK, they may have a preferred provider negotiated rate available to members. For me, that saved me about $800 off of the 'rack rate' that the LASIK center wanted to charge me as a walk-in.

 

[aresay]

Thanks for all of your replies. I do have a HDHP with HSA. However, I do not have enough in it to pay off the entire procedure at once. I was therefore planning on using it to reimburse myself.

If you go this route, my personal recommendation is to 2x or 3x the credit line you ask for. If your Lasik is going to cost $2.5K, when you fill out the application, ask for $11.5K (or something like that). If asked, say you have a number of healthcare items (hearing aides?) where the provider also 'recommended' Care Credit. That way your utilization ratio on that card will stay <25%.

Great recommendation for asking for a higher credit line to reduce utilization ratio. I didn't even think of that.

 

[aresay]

Yea, you're better off putting it off on a credit card that you have maybe if it has an intro 0% apr still or HSA if you have one. Alliant CU offers an HSA that you can create as well if your employer doesnt have one. It's an interest earning FSA as well.

It sounds like it might make more sense to open a separate rewards card with 0% APR for a similar period (like AMEX Everyday, which has a 0% APR for the first 15 months) since I can at least get some rewards out of it too. Obviously, I would pay it off before the introductory period ends.

 

[Gloobnib]

It sounds like it might make more sense to open a separate rewards card with 0% APR for a similar period (like AMEX Everyday, which has a 0% APR for the first 15 months) since I can at least get some rewards out of it too. Obviously, I would pay it off before the introductory period ends.

That is certainly viable as well, but keep in mind you'll basically be earning 1x on the healthcare spend and probably more importantly earning a signup bonus with that same spend (Side note: what I wouldn't give for a rewards card that paid 3x to 5x for healthcare/dental/vision!).

Lots of choices if you go that route. Two that immediately come to mind are the (N)OBC and the Amex Everyday Preferred which both come with a 0% introductory period. Both can be solid reward earners going forward if they match "your style".