What Is CareCredit And How Does It Work

Since it became very difficult to handle medical debt both financially and logistically, CareCredit, a subsidiary of Synchrony Financial, has signed arrangements with a wide range of healthcare providers to accept its credit card as payment for their services. 

In the United States, it is a serious and rising concern since public health insurance programs are only available to specific types of individuals, namely the elderly through Medicare and low-income people through Medicaid. 

Medical debt is the outcome of an individual’s inability to pay for significant or unexpected medical bills. While CareCredit seems to solve this problem, it is important to understand the extent of the problem.  

This article takes you through the CareCredit system, what it entails, who it serves, and how it works. 

The Extent Of The Problem CareCredit Moves To Solve

According to the Centers for Disease Control and Prevention (CDC), in 2018, over 15% of men and women in U.S. households had trouble paying medical costs. Emergency department visits, appointments to doctors or specialists, and delivery or associated treatment were the major sources of medical debt among U.S. individuals, according to a separate poll conducted in 2020.  

In 2018, the majority of insured people with medical debt owed less than 2,000 dollars, regardless of the kind of coverage.  

However, individuals with employer-sponsored insurance accounted for 10% of those with medical bills of $10,000 or more, while those with Medicaid coverage accounted for 17%. 

Many people are unaware that they might try to reduce their medical expenditures on a personal basis.  

According to a poll from 2021, 60% of persons in the United States with medical debts had effectively negotiated their bills, while 32% had just partially succeeded. Many hospitals are adding to their patients’ financial woes by suing them.  

The number of court actions launched by the country’s top hospitals against patients with outstanding invoices reveals an interesting finding: Only ten of the 100 hospitals studied filed 97 percent of court cases between 2018 and 2020, seeking millions of dollars from patients. 

What Is CareCredit? 

CareCredit is a part of Synchrony Financial (SYF) and functions just as well as a fintech company by offering people assistance in the various ways they need them. 

CareCredit has inked agreements with over 200,000 healthcare providers in the United States to accept its card as payment for their services. 

Their card can be used to cover traditional medical insurance copayments for approved procedures. The card can also be used to fund elective medical procedures that are not covered by standard insurance policies.  

Vision care, cosmetic surgery, dermatological treatments, dental services, and hearing care are among the medical procedures and wellness services covered by the card. 

Doctors, dentists, and surgical clinics, as well as vision and hearing centers, hair restoration, and even veterinary services, are among the providers. By entering their zip code on the CareCredit website, cardholders may search for local providers who accept the card. 

SEE ALSO: 10 Medical Sharing Plans In 2022 | New Insurance Alternatives

How Does CareCredit Work? 

When it comes to paying for medical treatments, especially those that aren’t covered by insurance, CareCredit has become a popular choice.  

One of the most helpful features of the CareCredit card is that it may be used several times, for various persons, and for multiple incidents. 

CareCredit promotes and publicly allows account holders to use the card to finance a variety of treatments and procedures that may or may not directly involve the account holder.  

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This implies that the card may be used not only for the account holder’s processes but also as a payment option for the account holder’s family members and even pets. 

The next step is to go to CareCredit’s website and use their payment calculator after getting a monetary quotation for the operation that requires payment.  

This offers the account user an estimate of how much the monthly payment will be based on the length of time it is divided.  

There is no interest if the total balance of the cost is paid up during the promotional period. If, on the other hand, the account holder demands a smaller monthly payment and, as a result, must prolong the payment period, interest accrues. 

The CareCredit Card 

CareCredit cardholders may search for nearby providers who accept the card by entering their zip code on the CareCredit website. 

Consumers who pay using the CareCredit card are eligible for short-term financing solutions that allow them to spread payments out over six, twelve, eighteen, or twenty-four months.  

In addition, there are no interest charges as long as they spend at least $200 and pay the full bill within the agreed-upon time period.  

Extended payment terms of up to 60 months are also available for minimum purchase quantities of $2,500, with interest rates as low as 17.9%. However, keep in mind that the indicated annual percentage rate (APR) on these cards is substantially higher, at 26.99 percent. 

What Is An APR? 

The annual percentage rate, or APR, is a sort of interest charged on a few different types of credit accounts. During a billing cycle, a credit card interest is charged to the cardholder.  

The annual percentage rate is applied to cash advances and late payments, and it may be larger than the usual rate. The annual percentage rate (APR) is determined every day by dividing credit card transactions by the annual percentage rate.  

Read More on What Is a Good APR for a Credit Card? How Does it Work?

CareCredit Requirements

CareCredit allows anyone to check if they qualify for a card, and checking this will not affect your credit score. In order to apply, you will need to provide Synchrony with the following information:

  • Name
  • Address
  • Date of birth
  • Social Security number or ITIN
  • Net income
  • Housing Information

Beyond this, Synchrony does not specify how they assess applications, or what the requirements are for their credit cards.

How To Apply For CareCredit? 

To apply for CareCredit, you do not need to be a member. Residents of the United States who are 18 years old or older can apply online. Those that apply by phone must be at least 21 years old.  

The issuer provides a straightforward application that determines if candidates are prequalified for a credit card without affecting their credit ratings.  

Basic information such as name, date of birth, social security number, and net income is required, as is the case with most credit card applications. 

Prequalification does not imply acceptance. If an applicant meets the pre-qualification criteria, he or she can proceed to a lengthier application that includes a hard credit check.  

After being authorized for the credit card, new cardholders can choose from the available promotions. 

The major attractions are the unique financing choices available to cardholders. Short-term promos have no interest, while long-term promotions have lower APRs than the regular 26.99 percent, which is greater than even the best-rated rewards-earning credit cards.  

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To avoid paying higher interest, the whole balance must be paid off during the promotional time. When applying for a card, cardholders are not needed to pick a promotional offer (it can be selected after approval and before paying for a large medical expense).  

It’s vital to verify with a healthcare provider before applying because not all providers provide the same promotional opportunities. 

What Credit Score is Needed for CareCredit?

Synchrony does not specify what credit score is required to qualify for CareCredit, and they do not disclose which credit bureau they use to obtain credit reports. Cards that function in a similar manner, such as proprietary store credit cards, typically have low credit score requirements. This may make it easier for people with limited or poor credit histories to obtain a CareCredit card.

Will I Get Charged For Using The Card? 

The nicest part about CareCredit is that amounts charged on your CareCredit account will not use up a percentage of your credit limit on other cards.  

You can also continue to make “new purchases” without incurring interest if you are paying your existing credit card bills in full each month and plan to do so in the future. 

The “delayed interest/no interest” offer, on the other hand, is a simple trap to fall into. It’s only free if you keep a flawless payment history and pay off your balance in full within the promotional period. 

They’re hoping you’ll only make the minimum payments or, at the very least, won’t be able to pay it off in full before the promotional period ends.  

In such a case, not only is the interest rate greater than on a standard credit card but the interest is compounded due to the interest deferral. This will be a major setback. 

It’s as if you think you’ve paid half of the initial sum off, only to be told that you’re back to square one since you didn’t pay it off within the promotional time or at least, some significant increase in your outstanding balance. 

Related Post: Can You Pay a Credit Card With a Credit Card? | 2022

What Are The Financing Options Available On CareCredit? 

1. Short-term 

On purchases of $200 or more, CareCredit provides no-interest financing for 6, 12, 18, or 24 months.  

To prevent interest, assuming the cardholder makes one significant purchase for medical expenditure, the amount should be paid off by the conclusion of the promotional period. You will be liable for the postponed interest if the balance is not paid in full. 

Short-term promos have no interest, while long-term promotions have lower APRs than the regular 26.99 percent, which is greater than even the best-rated rewards-earning credit cards.  

Before choosing a promotional period, cardholders should verify with their providers and read all of the card’s rules. 

2. Long-term 

Long-term CareCredit alternatives provide lower interest rates than the normal purchase APR of 26.99 percent. There are promotional durations of 24, 36, 48, or 60 months with variable lower APRs and set monthly payments. 

The set monthly payments on CareCredit’s long-term plans allow the cardholder to pay off the whole debt by the conclusion of the time. Be aware that these APRs are exorbitant, and that many ordinary credit cards have lower APRs.  

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While we appreciate that not everyone has the luxury of choice when it comes to financing, we strongly advise that you look into all of your options, especially non-credit-card lines of credit—before signing up for a loan with such high APRs. 

See the Best Personal Loans for Low Interest in 2022

Are There Disadvantages Of Utilizing CareCredit?

Here are a few disadvantages of using CareCredit. 

#1 Credit problems 

The credit usage ratio is one of the most important factors in calculating your credit score. Your credit usage ratio climbs as your credit debt rises, and your credit score suffers as a result. It might take years to restore your credit score after a major setback. 

A negative credit score may ruin your life by making it difficult to qualify for new lines of credit, as well as affecting your ability to find work, acquire a new phone line, or rent an apartment since employers and service providers frequently check your credit score to assess your reliability. 

READ ALSO: What Is The Lowest Credit Score Possible?

#2 Outrageous interest rates 

The interest rate on a credit card is a mystery. We’re all aware that credit cards come with dreadful APRs (Annual Percentage Rates), but few of us are aware of how to compute credit card interest rates.  

APRs on credit cards are often in the double digits and may be as high as 30-35 percent each year. Only when a credit card user carries a credit balance from month to month is interest imposed. 

As a result, if you pay your credit card payments on time, you won’t be charged any interest. However, if you just pay the minimum amount due, the high APR will be applied to the balance. The longer and larger your outstanding debt is, the more interest you’ll have to pay. 

SEE ALSO: What Is The Lowest Credit Score Possible?

#3 Problems with Time 

You’re simply telling your debt, “See you next month,” when you only pay the minimum on your credit card. 

The minimum payment requirements set by credit card issuers are usually extremely low. You’ll either be compelled to pay a specific amount or a % of the outstanding debt, as I previously stated.  

Some credit card providers demand you to pay just 1% or 2% of your credit card debt each month, plus any fees and accumulated interest. 

Making such little payments on schedule will certainly protect you from late fees, but you will make little progress toward reducing your total. 


Your specific account status, as well as your medical condition, may vary, and your credit file surely does, so your mileage may vary, but because CareCredit is a Revolving account, it may be a valuable Credit Score development tool.  

Just be sure to utilize it for the “X months no interest” deals rather than the 20 percent or more they charge on regular debt. 


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