This article was written by Odysseas Papadimitriou, Founder of CardHub.com, a website that helps consumers find the best credit card deals and operates the nation’s largest gift card exchange.
Healthcare is expensive. That’s exactly why health insurance exists. However, over46 million Americans don’t have health insurance, and many more than that don’t have dental. Even those who do have dental insurance are not likely covered for cosmetic or elective procedures. So what are people with gaps in their dental coverage to do?
Well, you could bite the bullet and pay out of pocket, but besides the fact that biting a bullet is probably bad for your teeth, most people don’t have that kind of disposable cash. Alternatively, you could take out a medical loan, but doing so might saddle you with high interest rates. Luckily, however, there is a third option, one that is both somewhat obvious and somewhat underutilized. Why not simply pay your dental bill with a credit card?
Credit card offers are as attractive as ever now because credit card companies are starved for responsible, dependable customers. Therefore, if you have made it through the Great Recession relatively unscathed, you could take advantage of low credit card rates in order to save on the cost of dental work. In fact, there are two main tools you have at your disposal when it comes to plastic: 0% APR credit cardsand 0% balance transfer credit cards.
Credit Cards with Low Interest Rates on Purchases
Most, if not all, dentists accept credit cards as payment. However, using a credit card to fund dental work is not as simple as going to your appointment armed with whatever credit card is in your wallet. Instead, even if you already have a credit card for everyday spending, you should open a credit card that offers 0% on purchases specifically to finance your dental bills (i.e. carry debt). Doing so is in keeping with the main tenet of credit card usage philosophy commonly known as the Island Approach, which holds that consumers use different credit cards to meet each one of their various financial needs.
Since the Great Recession began, offers for credit cards that have 0% interest on purchases have been popping up seemingly left and right. Not only do these offers have no interest, but they have no interest for up to two years.
Before you apply for such a card though, make sure to figure out how long it will take you to pay off the cost of whatever procedure you’re undergoing because once a 0% period ends, interest rates as high as 20% might kick in.
Balance Transfer Credit Cards
If you already garnered funding for a dental procedure, don’t worry. Theoretically, you can transfer any kind of debt—be it from a credit card, medical loan, auto loan, etc.—to a credit card. And if you transfer the debt from your dental loan to a 0% balance transfer credit card, you can save a lot of money on interest. However, some credit card companies restrict the types of debt you can transfer, so check with your issuer before heading down this road.
As is the case with credit cards that have 0% APR on purchases, high interest rates kick in when low-interest introductory balance transfer periods expire, so make sure you can pay down your balance before this occurs. Likewise, you must not forget to factor balance transfer fees into your evaluation of the financial benefit of such a transaction.
Whether or not you actually make use of plastic funding, it’s good to know the options at your disposal. Therefore, simply keep the different ways a credit card can be used to save money on dental work in mind next time you plan to undergo a procedure. Compare them to your alternatives and pick the method of funding that is most cost-effective.