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CareCredit: What You Need to Know About This Healthcare Credit Card

January 9th, 2018 · Credit Cards

CareCredit: What You Need to Know About This Healthcare Credit CardWhether 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.

What’s CareCredit?

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.

Deferred interest

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.

Reduced APRs

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:

Be prepared to provide the following personal information:

  • Your name
  • Address
  • 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:

  • Procedures
  • Copays
  • Deductibles
  • Prescriptions
  • 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:

  • Chiropractic
  • Cosmetic
  • Day spa
  • Dentistry
  • Dermatology
  • Healthcare specialists
  • Hearing
  • LASIK and vision
  • Primary and urgent care
  • Veterinary
  • 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:

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.

Get more tips on smart credit card use.

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Credit Repair 2018: What’s Different & What Stays the Same

December 26th, 2017 · Credit Repair

Credit Repair in 2018: What's Different and What Stays the SameWhether credit repair is new to you or you’ve been at it for months, take the time to review what’s different in 2018 and what stays the same. Granted, the basics haven’t changed, but your credit repair efforts need to reflect what happened with the Equifax hack and Text for Credit technology in 2017.

What’s different

You need to keep credit freezes on all of your credit files

Also known as a security freeze, a credit freeze prevents anyone from accessing your credit reports and scores. The goal? To stop fraudsters from trying to open credit accounts in your name. Unfortunately, it also prevents you from opening new lines of credit, too. You can work around it, but doing so requires lifting or removing the freeze when you want to apply for credit followed by the subsequent re-freezing – tasks that can come with nominal fees that vary by state.

For these reasons, credit freezes have not really caught on as a practical credit protection tool. That all changed in 2017.

In September, we learned about the Equifax hack that exposed the data of 143 million Americans in July 2017. We’re not just talking about data that can be changed, like credit card numbers. We’re talking about names, dates of birth, and social security numbers that never change. In other words, half the country is going to have to worry about fraudulent credit accounts stemming from the Equifax hack for the rest of our lives. So, when weighed against a threat like that, credit freezes now represent the most practical means of protecting yourself from fraud.

With your bad credit, maybe you’re thinking no one would be able to open an account in your name anyway. You may be right. But what about when your credit repair efforts work and you have good credit again? Fraudsters will still have all the information they need to open a fraudulent account for years to come.

See details for placing freezes on your credit files.

You don’t have as many free credit monitoring options

Yes, plenty of free credit monitoring services still exist. The problem is that many of them won’t work while a credit freeze is in place. That’s bad news during the credit repair process, when you need regular access to reports for tracking your credit repair efforts (and the last thing you want to do is pay expensive fees for the access). Fortunately, our number one recommended free credit monitoring site works just fine with a credit freeze – Credit Karma.

While you will need to lift the freeze (or wait to place it) until after you have signed up, once Credit Karma has been granted access to your credit files, they’re in. You can re-freeze your credit (or place the freeze) after the sign-up process and Credit Karma will continue to work while the freeze is in place.

Of course, Credit Karma only monitors two of the three major credit reporting bureaus – TransUnion and Equifax. Thankfully, the third bureau – Experian – has its own free credit monitoring service called CreditWorks Basic that you can sign up for anytime (whether a credit freeze is in place or not).

See details about monitoring your credit when a freeze is in place.

You may be tempted by Text for Credit

When you’re just getting started with credit repair, addressing existing credit accounts should take precedence over adding new ones. However, at some point, it will be a good idea for you to apply for new credit to help boost your credit score even more. The easier this process, the better it might seem, but beware of temptations that may not be in your best interest. Case in point? Text for Credit.

In July 2017, credit bureau Experian launched Text for Credit, an industry-first technology that allows you to quickly apply for credit from your smartphone.

This raises a couple of concerns:

  • If it’s too easy to apply for credit, you may be tempted to apply for more than you need. While applying for credit here and there is no big deal, multiple inquiries – especially over a short period of time – doesn’t look good to creditors. Also, the more credit accounts you have, the more susceptible you are to getting in over your head.
  • The offers available through Text for Credit may not represent the best terms you can get. So before you apply, shop around for other offers first. And read the fine print. You need to know interest fees and rates (including how long introductory rates are going to last).

Learn more about Text for Credit.

What stays the same

DIY credit repair

Yes, you can pay a credit repair company to do it for you, but there is nothing they can do that you cannot do for yourself (see steps outlined below). That said, DIY credit repair isn’t for everyone. Just do yourself a big favor and educate yourself about what to look for in a legitimate credit repair company before you hire one.

Checking your credit reports through AnnualCreditReport.com

Every 12 months, you are entitled to see your credit reports for free – from all three credit bureaus – through AnnualCreditReport.com. You don’t have to sign up for anything (though you will need to provide the personally-identifying information necessary to prove your identity). This should serve as the foundation for your credit monitoring efforts, which you can supplement with free monitoring services (referenced above through Credit Karma and Experian CreditWorks Basic) throughout the year.

Disputing errors on your credit reports

While the majority of your credit problems may stem from listings you know to be correct, you never know what sort of errors could be making your situation worse. Plus, listings on your credit report must not only be accurate, but also verifiable. In other words, if you suspect something on your credit report is either inaccurate or unverifiable, you should dispute it through the appropriate bureau.

Learn more about credit disputes.

Requesting debt validation from debt collectors

When an original creditor turns your debt over to a collection agency, you will receive a notice from the agency demanding payment. As soon as you receive this notice from the collection agency, request debt validation from them. This means asking them to prove that the debt exists, belongs to you, and they have the right to collect on it.

Just keep in mind, you only have 30 days from their first communication with you to request debt validation, so act immediately. If they are unable to provide this validation, you not only owe them nothing, but they must also remove any negative associated listing they reported to the credit bureaus (which does not apply to negative listings reported by the original creditor).

Note, you can use this same technique for debt every time it changes hands from one collection agency to the next, if applicable.

Learn more about debt validation and use this sample letter when you’re ready to request it.

Checking the statute of limitations on old debt

Before you pay an old debt – or even request debt validation when the debt changes hands – check the statute of limitations. The number of years varies by state, but there comes a time when you are no longer legally required to pay on a debt. You can check the statute of limitations here. If it’s up, and a collection agency is still trying to collect on it (known as “zombie debt”), tweak and send this sample letter to the collection agency.

Settling old debt that cannot be dealt with any other way

If the statute of limitations has not been reached yet and the collection agency validates the debt, it’s probably a good idea to try and settle the debt. The key to improving your credit is including pay-for-delete in the settlement arrangement. There’s no guarantee it will work, but it’s worth a try.

Note, if the statute of limitations will be up soon, you may want to just wait it out. Just keep in mind there is always the possibility that you could be sued for the unpaid debt.

Learn how to settle debts with collection agencies.

Paying delinquent debts that have not been charged off

If you have debt that the original creditor has yet to turn over to a collection agency, contact them about getting on a payment plan. Because as harmful as late payments with the original creditor may be to your credit, they’re not as bad as the charge-off and collections listings that are sure to follow if you let it go that far.

That said, never agree to a payment plan that you cannot afford. Look at your finances carefully before you call the original creditor to be sure any offer you accept is one you can follow through on.

Paying down high credit card balances

Thirty percent of your FICO Score is determined by amounts owed on your credit accounts. This includes your credit utilization ratio on your revolving credit accounts. That is, the amount of credit you are using relative to how much you have available to you on credit cards (as well as home equity lines of credit).

In other words, the higher the balances on your revolving credit accounts, the worse it is for your credit score. So, if you cannot pay them off altogether, by all means, put yourself on a payment plan to pay down your credit card debt.

Try the debt snowball and avalanche methods.

Building positive credit

As much good as it will do your credit to deal with negative listings that are dragging down your score, equally important is adding positives into the mix. There are numerous ways you can do this, including:

Want to learn more?

Check out our 20-Step Guide to DIY Credit Repair and ask questions in our free credit repair forum.

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Our 11 Most Bookmark-Worthy Credit Repair Posts of 2017

December 12th, 2017 · Credit Repair

Our 11 Most Bookmark-Worthy Credit Repair Posts of 2017If you want to repair your credit in 2018, look to the best-of-the-best blogging we did on the subject in 2017. Collectively, these comprehensive, easy-to-follow posts will tell you everything you need to know about repairing your credit — this year, or any year — from a 20-step DIY guide to 22 credit monitoring options. Get the facts and get to work!

20-Step Guide to DIY Credit Repair

In general, DIY credit repair is pretty straightforward. You clean up your credit reports, deal with outstanding debt, and practice good credit-building habits going forward. But to make all of that happen, you need a detailed roadmap on how to:

  • Request and analyze your credit reports
  • Write, send, and follow up on credit dispute letters
  • Use debt validation with collection agencies
  • Deal with “zombie debt”
  • Decide whether to add personal statements to credit reports
  • Pay delinquent debts that have not been charged off
  • Pay down outstanding credit card balances
  • Negotiate a pay for delete
  • Settle debts for less than you owe
  • Monitor your credit
  • Submit complaints to the CFPB
  • And more

Learn the ins and outs of all these things in this 20-step guide.

21 Credit Repair Tools We Will Show You How to Use

No matter which step you’re on in the DIY credit repair process, there’s a tool that makes it easier. Some are free, others come with a fee. So before you delve in, review all of the tools at your disposal.

Free tools you don’t want to miss:

  • AnnualCreditReport.com
  • Credit Karma
  • Experian CreditWorks Basic
  • Discover Scorecard
  • Dispute letter template
  • Debt validation letter template
  • Zombie debt letter template
  • Remove inquiries letter template
  • Goodwill letter template
  • Banking apps
  • Budgeting apps
  • Fraud alerts

And tools that come with fees (and that you may decide are worth the cost):

  • FICO Score 3-Bureau Report
  • FICO Ultimate 3-Bureau Credit Monitoring
  • Secured credit card
  • Credit builder loan
  • Rent reporting service
  • Credit freeze

Take a look at how to use these and other credit repair tools.

How to Repair Bad Credit When a Credit Freeze Is in Place

In the wake of the Equifax hack, it is recommended you place a credit freeze – also known as a security freeze – on your credit files. This way, if anyone tries to open credit in your name, the creditor won’t be able to check your credit when trying to qualify you.

Yet, as helpful as a credit freeze may be in protecting you from fraud, it can make a couple of things more challenging during the credit repair process. While a credit freeze is in place, 1) many free credit monitoring services won’t work and 2) you won’t be able to apply for new credit (when trying to build it back up).

Learn how to work around a credit freeze when you need to.

9 No-Nonsense Ways to Build the Best Credit

Repairing bad credit doesn’t end once you’ve dealt with your negative credit history. It continues with all the steps you can take to ensure a positive credit future:

  • Pay all your bills on time, every time
  • Be mindful of your credit mix
  • Shop around for the best credit terms
  • Apply for credit offers compatible with your credit score
  • Minimize credit applications
  • Use no more than 10 to 30 percent of revolving credit at a time
  • Pay off your credit card balances every month
  • Think twice about canceling credit cards
  • Monitor your credit

Get the details you need to take these positive credit steps.

Credit bureaus

How Credit Bureaus Work (and How to Make Them Work for You)

It’s easy to have a love-hate relationship with the credit bureaus.

On the one hand, it is because credit bureaus collect payment history from lenders that you are able to establish the kind of credit that qualifies you for new accounts, and under the best terms.

On the other hand, the credit bureaus are unforgiving when you have trouble making your payments. No matter the situation, it gets recorded and stays on your record for years to come.

What’s worse is when the credit bureaus (or data furnishers) make mistakes, hurting your credit through no fault of your own.

Fortunately, the credit bureaus have a system in place for you to submit a formal dispute regarding any listing that you believe is inaccurate or unverifiable — an absolute must during the credit repair process. To that end, find out where credit bureaus get their information, how they turn it into scores, how to write and submit your disputes, and how credit bureau investigations work.

Get the facts about the credit bureaus.

Credit reports

Guide to Credit Reports: 11 Things Simply Explained

It’s pretty common knowledge that you need to check your credit reports, especially during the credit repair process. But some other things aren’t quite so clear, like which reports you need to see, where to get them, how to read them, and what you’re looking for.

Find out:

  • What credit report actually means
  • What’s on a credit report
  • Where they come from
  • Why they matter
  • How credit reports are organized
  • Who can see them
  • How to get them
  • Which ones you need to see
  • Using your credit reports for credit repair
  • When negative listings fall off credit reports
  • Using them to detect identity theft

Learn everything you need to know about credit reports.

Have You Looked for These Errors on Your Credit Reports?

In an oft-cited study, the FTC found that 1 in 5 consumers had an error on their credit reports that was corrected by the credit bureaus after it was disputed. That’s pretty good odds, making it well-worth your while to take the time and effort to look for errors and dispute them when you are trying to repair your credit. The question is, what should you be looking for?

The list of specifics is long, but, in general, you want to look for:

  • Incorrect personal information, account details, amounts, and dates
  • Multiple listings of the same debt
  • Previously removed listings reinserted
  • Settled accounts not reflected as such

Take a look at a complete, detailed list of potential errors on your credit reports.

Credit scores

Making Sense of Credit Scores Once and For All

One of the biggest misconceptions people have about credit scores is that you only have one of them. In fact, there are hundreds of algorithms out there that companies may use to generate credit scores. That said, FICO and VantageScore are the most widely used and known, so those are the two we focus on in this post (i.e., the ones you need to be most concerned with improving).

Find out:

  • The difference between credit scores and credit reports
  • How credit scores are helpful
  • How they’re generated
  • The credit score scale
  • Types of credit scores (FICO vs. VantageScore)
  • What’s included in a credit score and what’s not
  • Which credit scoring model (and version) lenders use
  • Who can see your credit scores
  • How often you should check your credit scores
  • Where to get your credit scores
  • When you receive credits score notices
  • Understanding reason codes
  • How to improve credit scores

Let’s make sense of all this, once and for all.

The Truth About Alternative Credit Scores

If you have bad credit, the more comfort you may take in the possibility of alternative credit scores improving your creditworthiness. But how much good can they really do? Alternative credit scores might get you approved for some types of credit, but is it worth the price you’ll likely pay for subprime interest rates? Weigh the pros and cons, and find out who generates alternative credit scores and which creditors use them to make lending decisions.

Get the facts and see our alternative credit scoring recommendations.

Credit monitoring

22 Ways to Monitor Your Credit

Whether you are repairing your credit, or just trying to maintain the good credit you already have, monitoring your credit is an absolute must. Fortunately, you have plenty of options, some free, others for a fee.

Free credit monitoring

You can get free credit monitoring through:

  • com
  • Credit Karma
  • Experian CreditWorks Basic
  • Some credit card issuers

Other circumstances make you eligible for free credit reports, including:

  • Receiving an adverse action notice
  • Receiving a risk-based pricing notice
  • Having a change made to your credit report due to a dispute
  • Belief that your credit report is inaccurate due to fraud
  • Being unemployed and looking for work
  • Receiving public welfare assistance
  • Living in a state that provides you with a free credit report

Paid credit monitoring

Though free credit monitoring is obviously ideal, there may be circumstances in which it’s worth paying for. Of the paid offerings out there, we recommend:

  • The credit bureaus themselves (e.g., Experian, TransUnion, Equifax)
  • myFICO.com

See a complete list and details of all your credit monitoring options, both free and for a fee.

How to Use Free Credit Monitoring When a Credit Freeze Is in Place

Up until recently, you had numerous options for free credit monitoring. But now that you need to keep a credit freeze in place pretty much all the time (again, in the wake of the Equifax hack), your options are more limited. Because, unfortunately, not all free credit monitoring sites will work while a credit freeze is in place. Obviously, you want to take advantage of free options, but not at the expense of unfreezing your credit and making yourself more vulnerable to fraud.

Take a look at our recommendations for free credit monitoring while a freeze is in place.

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