Whether you need it now for a medical emergency or you’d like to have it on hand just in case, CareCredit can be a helpful credit card, especially with its deferred interest options. And you don’t need excellent credit to get it, meaning it can be a good way to not only finance health-related expenses, but also a good way to repair your credit score. That said, it’s important to understand what’s in the fine print or it could be costly. Get the facts about how CareCredit’s deferred interest financing works, where you can use CareCredit, what you can use it for, and more.
CareCredit is a healthcare credit card.
It was founded as DenCharge in 1987 by Ralph Stern, a dental implant provider.
Stern’s dentist clients told him that their patients were having a hard time affording the implant procedure. DenCharge provided the financing patients needed to get the job done.
Soon, the company expanded its financing to include chiropractic and veterinary procedures. They changed the name to CareCredit, eventually widening the range of covered financing even further, from vision and hearing, to cosmetic surgery.
Today, CareCredit is a subsidiary of Synchrony Financial, the nation’s largest provider of private label credit cards, including Amazon, Walmart, Lowe’s, CheapOAir, Discount Tire, J.C. Penney, and more.
How does CareCredit work?
When you have a CareCredit account, you can use it to charge healthcare-related expenses that are not covered by an insurance policy. However, not all healthcare providers take CareCredit, so never assume you’ll be able to use it; ask first.
As with other types of credit cards, you will have a credit limit and a set interest rate. You will also receive monthly statements and make monthly payments. And, of course, CareCredit will report your payment history to the credit bureaus, so it’s a great way to strengthen your credit score.
The standard APR is 26.99 percent, but yours may vary depending on your credit score and other factors. Even so, CareCredit offers promotional periods during which time interest is deferred for a set number of months on minimum purchases of $200.
There’s just one catch.
You have to pay off the full financed amount before the period ends, which may be 6, 12, or 18 months. You may do this in equal monthly payments or in minimum monthly payments that are enough to pay off the balance by the time the promo period is over. You may also have the option of doing fixed monthly payments, which makes you eligible for 24 months of deferred interest.
In any case, if you fail to pay the balance off by the end of the promo period, you will be charged interest for the full financed amount.
For example, let’s say the original financed amount was $500, but you only pay off $400 of it by the time the promotional period ends. That leaves you with a balance of $100. You will not only be charged interest on the $100 you have yet to pay, but also on the $400 you’ve already paid as well.
Purchases financed over longer periods of time are not eligible for deferred interest. However, minimum purchases of $1,000 may make you eligible for a reduced APR at 14.90 percent over 24, 36, or 48 months, and minimum purchases of $2,500 may make you eligible for a reduced APR of 16.90 percent over 60 months. (These terms also require fixed monthly payments.)
See financing examples on CareCredit’s website.
Availability of financing options
Not all participating healthcare providers or health-focused retailers offer all of these financing options.
How do you apply for CareCredit?
You have several options. You can apply:
- Through a participating healthcare provider
- Online at CareCredit.com
- By calling 800-677-0718 (automated 24/7; staffed with representatives Monday-Friday 9 am to 9 pm ET); note, they ask that you read the credit card agreement before you call
Be prepared to provide the following personal information:
- Your name
- Date of birth
- Social security number
- Net income
- Housing info
You’ll also be asked your doctor’s name or how you plan to use the card. And, of course, you need to be at least 18.
Approvals are instantaneous.
Can CareCredit be used anywhere?
No. Only participating providers accept CareCredit. Fortunately, there are many of them to choose from – more than 200,000 healthcare professionals and health-focused retailers nationwide.
Where is CareCredit accepted?
Use the locator tool on CareCredit’s website. You can search by profession, doctor, zip code, and radius.
Which pharmacies accept CareCredit?
CareCredit is accepted at all Rite Aids and RediClinics nationwide.
Can CareCredit be used for anything?
No. CareCredit can only be used for health-related transactions – either through participating healthcare providers or health-focused retailers.
What can CareCredit be used for?
CareCredit can be used for:
- Product purchases at participating health-focused retailers
What types of procedures can you use CareCredit for?
The range of qualifying procedures may surprise you, including:
- Day spa
- Healthcare specialists
- LASIK and vision
- Primary and urgent care
- Weight loss
That’s a tempting list of possibilities for your CareCredit card. More than just a way to charge medical emergencies, it offers you a way to finance procedures you do not need, from facials and massages to microdermabrasion and the removal of age spots.
In other words, it’s easy to get in over your head, charging things you cannot afford.
What should you charge to CareCredit?
What we recommend is that you treat CareCredit the same way you would any other credit card – only charging what you can afford to pay back before they start charging you interest.
For most credit cards, this means paying it off within a month’s time (i.e., the grace period). CareCredit, however, offers promotional periods that let you carry debt interest free for months at a time, ranging from 6 to 60 months with various APRs.
This makes charging a medical emergency a no-brainer – you need it and you have several months to pay it off. For non-essential procedures, though, think twice. Is there really a place in your budget for this or will you be sacrificing something else?
Unless it is an essential healthcare procedure, think twice about charging something to your CareCredit card if you still need to:
- Build a $1,000 emergency fund
- Save up 6 months of living expenses
- Pay off other credit card debt
- Save for a down payment on a car or home
- Start contributing to a 401(k) or IRA
Plus, don’t forget how the promotional period works.
It’s only interest fee if you not only make minimum monthly payments, but also return the balance to zero by the period’s end. If you fail to do this, you are charged interest. Not just on the remaining balance but on the full balance you originally borrowed.
In other words, if your financial situation changes during the promotional period and you aren’t able to pay the charged amount back within the allotted time, you’re looking at a costly adjustment. That’s an easier pill to swallow if it was for an essential medical procedure than something you didn’t need.
Which credit bureaus does CareCredit use?
Any of the three major credit bureaus may be checked when you apply for CareCredit. That’s not to say they check all three, only that the one they do check will be chosen randomly. This means it’s important to make sure your credit reports from all three bureaus are in good shape.
Can you apply for CareCredit if you have a credit freeze on your credit reports?
Yes. You will just need to lift the freeze temporarily while they process your application. We called and spoke with a representative at Synchrony Financial who said you have a couple of options:
- Apply before you lift the freeze. When they see that your credit is frozen, they will contact you and ask you to lift the freeze on one of your credit reports so they can process your application.
- Lift the freeze on your credit report of choice. Call in to apply and let the representative known which of the freezes you have lifted.
Note, this is a process you will need to get used to, as it is recommended in the wake of the Equifax hack that you keep credit freezes on your reports indefinitely.
Is CareCredit hard to get approved?
Credit approval on anything depends on a number of factors. But this thread on the Credit Card Approvals board at myFICO.com offers some interesting insight:
- 638 FICO approved for $3,000
- 662 FICO approved for $4,000
Again, though, other key factors are considered when deciding on approval and credit limit, like income and housing information.
Wasn’t CareCredit accused of deceptive enrollment practices?
Yes. In 2013, when CareCredit was a subsidiary of GE Capital, the Consumer Financial Protection Bureau (CFPB) said that CareCredit was misleading consumers about the way deferred interest worked.
As we blogged in December 2013:
“In addition to the interest rate not being adequately explained to cardholders, they often are not provided with a copy of the agreement, equipped only with the information that has been shared with them orally.
“These are considered deceptive credit card enrollment practices that have cost cardholders millions in unexpected interest fees, thus the enforced refund [of $34 million].”
The enforced refund was for $34 million.
CareCredit now provides a copy of the credit card agreement on its website and makes clear – through several examples of financing scenarios – how its deferred interest works.
Will CareCredit raise my limit?
Possibly. Call 866-893-7864 to inquire.
Can CareCredit be used for someone else?
Yes, but with limitations. As stated on its website, you can use CareCredit for “you, your family, and even your pets.”
How often do I need to use my CareCredit card?
To keep it active, you will need to use it at least once a year.