Risk of Using Credit Cards to Pay Medical Bills

Approximately one in four adults with past-due medical debt report using a credit card to pay for some or all of their medical bills.  

The Issue

Researchers suggest that consumers are increasing their reliance on credit cards to pay for medical bills. Using a credit card to pay off medical debt leaves individuals at risk of further financial hardship.   

Key Findings

• Hispanic adults (30%) were more likely to pay off past-due medical debt with a credit card compared to non-Hispanic Black adults (25%) and non-Hispanic White adults (21%).  
• The share of adults with past-due medical bills who paid off debt on credit cards was approximately the same for adults with family incomes above and below 250% of the federal poverty level (25% and 24%, respectively).  
  • However, prior research indicates that adults with lower incomes are more likely to have past-due medical debt.  
• Individuals who use a credit card to pay off medical bills are susceptible to high deferred interest rates. Between 2015 and 2020, one in five healthcare purchases were charged deferred interest, including approximately one in three purchases by individuals with low credit scores.  

Conclusion

Adults who accumulate past-due medical debt are using credit cards to pay off their debt more frequently, leaving them susceptible to late fees, high interest rates, and increased risk of damage to their credit.  

About the Author/Grantee

The nonprofit Urban Institute is dedicated to elevating the debate on social and economic policy. For nearly five decades, Urban scholars have conducted research and offered evidence-based solutions that improve lives and strengthen communities across a rapidly urbanizing world. Their objective research helps expand opportunities for all, reduce hardship among the most vulnerable, and strengthen the effectiveness of the public sector. Visit the Urban Institute’s Health Policy Center for more information specific to its staff and its recent research.