Dear Penny: I Need Surgery. Should I Charge the Bill to a Credit Card?

This illustration shows a doctor and a patient at the hospital.
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Dear Penny,

I have a small Visa card that I pay off before it is due, so my credit is good, but I have only had credit for a little over two years. 

I started by putting up $500 for seven months and using only 20%-30% of the balance. Then my regular bank gave me a credit limit of a bit more than $3,000. I always pay off what I use so I don’t have to pay the interest, which is over 20%. 

My concern is that I will need between $2,500 and $5,000 or more soon for cataract surgery. I am hoping to find another 0% card for a year to give me time to pay it off without interest. Would that hurt my good credit? 


Dear M.,

There are some things that matter more than your credit score. Your eyesight is one of them.

So if your only option for getting this surgery is to pay for it via credit, I want you to do that — even if you have to pay interest on it.

As for your question, the short answer is that yes, opening a new credit card and charging a medical bill to it would probably hurt your credit in the short term. There are two main reasons for this: You’d increase your credit utilization ratio, which you never want to exceed 30% of your available credit, and you’d lower your average credit age.

But the hit would only be temporary. This isn’t like missing a payment or having an account sent to collections, which will stick around on your credit report for seven years.

When you reduce your credit utilization ratio by paying down debt, you see your credit score improve pretty quickly. So if you opened a new credit card and paid it off within a year, your score would probably rebound to around where it’s currently at a couple months after that. Your average length of credit only determines 15% of your credit score, and since you’ve only had credit for two years, the effect should be minimal.

Still, I’m hoping that you can avoid putting your surgery on a credit card. Here’s why.

Medical bills are among the most negotiable types of debt. It’s worth at least having a conversation with your doctor and the billing department about whether they’d be able to put you on a payment plan.

Owing a medical provider instead of a credit card company has several key advantages: Doctors and hospitals rarely charge interest. They also don’t report to the credit bureaus, so your credit score wouldn’t be affected as long as you don’t become so delinquent on payments that your bills are sent to collections.

And in the worst-case scenario that your bill does go to collections, people with medical bills are afforded certain protections. For example, the credit bureaus require a 180-day waiting period before medical bills in collections can appear on your credit reports.

If you can’t work out a payment plan in advance, try shopping for personal loans as well as credit cards. Getting approved for a 0% interest credit card may be tough right now because banks are nervous that customers won’t be able to afford their payments. Personal loans often have lower interest rates than credit cards, plus they have less impact on your score because they don’t affect your credit utilization.

Your provider may suggest that you apply for a medical credit card — and these often advertise a temporary interest-free window. Read the fine print extra carefully here. These cards frequently offer deferred interest, rather than a true zero-interest period.

With deferred interest, you’re still accruing interest. If you pay off the entire balance during the promo period, great. You don’t pay any interest. But if you charge a $5,000 balance and have just $100 left to pay off at the end of the “interest-free” period, you’d owe interest on the entire $5,000 balance.

If that’s the case, a regular credit card would be a safer option unless you have a truly rock-solid plan to pay off your balance in full during the promo period.

Regardless of what option you choose, kudos to you for thinking through how you’ll pay for this procedure and the impact to your credit score now, rather than after the fact when you have the bill in hand.

Even if you have to use credit to pay for this procedure and your score drops, think of it as a temporary setback. Apply the same healthy habits you’ve used to build good credit toward paying off this bill, and your score will rebound.

Robin Hartill is a certified financial planner and a senior editor at The Penny Hoarder. Send your tricky money questions to [email protected].