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Ways to Finance a Large Medical Bill

January 16, 2019

By Christopher Wolfington

There aren’t really any good times to encounter a large medical bill. As a result, many
Americans simply don’t have the cash on hand to fully pay these sizable, surprising costs.
Thankfully, there are multiple options that help weather large bills. Here are four ways to
finance a large medical bill.

Credit Card

One of the simplest ways to finance a large medical bill is the same way millions of Americans
finance any other large purchases: through a credit card. There are a wide variety of credit card
options, with many of them boasting perks like cash back rewards or travel points.
Furthermore, many retailers have their own credit card, which often grant greater perks for
that specific retailer.

While many Americans already have credit cards that they can utilize, making them extremely
convenient, credit cards are best used for medical purchases that can be paid back relatively
quickly. That’s because credit cards have high APRs—annual percentage rates—that can
balloon the cost of a medical bill by hundreds or even thousands of dollars over the long run.

Medical Credit Card

A subset of credit cards, medical credit cards are what they seem to be: credit cards explicitly
intended for use for medical expenses. While exact terms are different card to card, medical
credit cards offer 0% interest rates for a period of time, generally between 6-24 months. This
allows the patient to pay for their services over a course of time without paying any additional

The downside to medical credit cards is twofold. First, that not all medical services or providers
are covered by the card. Second, that these cards do not generally have any lower interest than
standard credit cards, and so also share their downside in regard to long-term costs.

Personal Loans

For patients who do not want to charge their credit card with medical bills, or for those whose
medical bills are particularly expensive, personal loans are a strong option. Personal loans
generally have lower interest rates than most credit cards, and they often pair this with higher
borrow limits and a more relaxed approach to credit checks.
Many companies offer personal loans, from traditional banks to peer-to-peer lending sites like
Prosper and LendingClub. For those with low credit scores, however, rates offered by personal loans may not be particularly low. However, they will generally still be lower than credit card

Home Equity Line of Credit (HELOC)

While not accessible to those who don’t own a home or have equity in a house or condo, a
HELOC may be an interesting option for those who do. Essentially, a HELOC is a second
mortgage that borrows money against your own home’s value. There are credit limits, income
limits, and remaining mortgage limits in order to receive a HELOC.
Benefits of a HELOC are clear, as it can offer instant access to tens of thousands of dollars at
very low, if variable, rates. But HELOCs are not available to everyone, even to all homeowners.

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