A credit card for your healthcare "needs"

Consumers are finally in a time and place where just about anything and everything can be financed. I'm no longer surprised when I hear an industry announcing that they "now have financing available" for their customers.

About seven years ago, a friend who owned a laser hair removal clinic told me that she was going to offer financing. I was floored, thinking that laser hair removal is a totally elective procedure, and one that people probably shouldn't get if they can't pay for it. But I'm apparently alone in that thinking, because offering financing gave her an immediate sales boost.

Financing for medical procedures is becoming more widespread. And I suppose it makes sense. Doctors and service providers don't want to offer credit anymore because they don't want to take a hit if you don't pay. It's much better and easier to have a finance company keep track of the money.

Credit card companies like Citibank and CapitalOne are now offering these financing plans. Some appear to offer the financing via a specialized credit card, others with a plan that one applies for at the doctor's office. On the one hand, I can see that these cards and plans may offer an option to someone who needs care and can't pay for it. On the other hand, I just don't know that a credit card (usually with a high interest rate) is the right way to pay for medical care.... especially if it's elective!
Even when consumers get a special rate of 0% initially, they can end up paying a lot of money in the long run. Many of these cards or plans retroactively charge interest from the date you opened the account if you don't pay the balance in full by a certain date. That can hurt.

I stand by my belief that anyone getting an elective, cosmetic procedure shouldn't get it unless they can actually pay for it up front. Botox? Not necessary. Pay cash. Laser hair removal? Needed by many, but not a necessity in life. Teeth whitening? Also totally cosmetic. Consider these healthcare financing options only as a last resort to pay for medically necessary procedures. And be careful when adding to your debt load this way. It can cost you a lot in the long run.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.
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