In the third quarter of 2022, total household debt reached $16.51 trillion, according to a Federal Reserve Bank of New York report.
Part of this debt came from mortgage and credit card balances. But despite this significant debt, credit is still one of the viable options to pay for hospital bills and other healthcare services, like cancer treatment.
Cancer has more than 100 types, from common conditions, like lung and breast cancer, to rare conditions, like mesothelioma.
The Mesothelioma Group site provides information on mesothelioma treatment and various payment options to help ease your financial burden.
If you’re a cancer patient exploring your treatment payment options, what benefits does paying with credit have? Can you get credit counseling if you’re having difficulties repaying your debt?
This article discusses the benefits of using credit to pay for a cancer patient’s needs and also talks about credit counseling for individuals who have trouble paying their debt.
Some hospitals and healthcare providers accept credit from clients or cancer patients for cancer management and treatment services. But credit entails financial responsibilities that can be challenging to manage without some forethought and proper management.
One advantage of credit is that it lets you pay for services or purchases over a certain period. For individuals who need more cash, such a benefit gives them enough time to gather funds before the bill arrives.
Some credit users who don’t properly manage their credit may face difficulties like getting into too much debt, making it challenging to pay off the amount owed, or prolonging the payment terms.
Using your credit wisely and avoiding unnecessary purchases can provide you with the following:
- An alternative money source if you can’t work, don’t have sufficient cash, or have large medical bills and other necessary but huge expenses
- Additional life or credit life insurance that pays off the account balance if the cardholder passes away
Other benefits of using credit for those who have cancer include the following credit card protections, usually available for a fee:
- Credit life insurance: This protection helps pay off the balance of a particular debt upon the borrower’s death.
The monthly premium for this life insurance usually depends on your outstanding balance.
- Credit disability insurance: Also called accident and health insurance, this policy entails that the company will pay off your debt if you become ill or injured and cannot work.
- Bundled protections: Larger credit companies often offer packages or bundles of insurance options, making it more convenient for the customer. These bundles can include some or all protections for:
- Job loss
- Short- or long-term disability
Another benefit of using credit is that some credit companies let you lower your credit card costs by transferring higher-rate balances to low-interest cards.
These credit companies often offer low-interest introductory rates for new credit card accounts. Sometimes, these companies can provide permanently low rates if you frequently pay on time.
To transfer your balance to a new card, contact the new credit card provider so that they can let you know what you should do for a smooth transition.
You don’t need to close your old account unless it’s keeping you from opening new accounts with lower fees and higher limits. If you can, keep that old account open for emergencies.
If you have an existing credit card but qualify for a different bank that offers lower interest, you can request your current provider to match the lower rate. An excellent bank will lower its rates to keep its client.
Not all individuals making purchases or paying for hospital services on credit can pay off their debts. For example, an expensive cancer treatment paid on credit can become too costly to pay back.
Credit counseling can guide you on consumer credit, budgeting, and debt and money management.
Most credit counseling programs aim to help debtors avoid bankruptcy when these individuals find themselves in huge debt.
For instance, many counseling services can negotiate with creditors on behalf of the borrower to lower the interest rates or waive late fees.
The Consumer Financial Protection Bureau (CFPB) mentions that although credit counselors often operate on a for-profit basis, many counseling agencies also offer nonprofit services.
Credit counseling companies can collaborate with you to create a debt management plan (DMP) if you have issues managing your debt.
A DMP lets you make a single payment toward your debt each month. Under this plan, you can make monthly deposits into an account with the credit counseling company, which uses these funds to pay your unsecured debt, like credit card dues and medical bills.
Reputable credit counseling companies employ trained and certified counselors who can help clients develop a plan tailored to the clients’ credit concerns.
An initial counseling session usually lasts an hour and may entail follow-up meetings. A reputable agency should offer information about its services free of charge, without requiring potential clients to disclose details about their situation.
Credit counseling can also help get you out of debt, depending on your needs and situation.
Suppose you’re struggling to pay your cancer treatment bills. A credit counselor can review and analyze your income and spending habits to help identify areas where you can allot more money to pay off your debts.
You can also discuss debt repayment strategies with a credit counselor who can recommend an approach that works for you. For instance, the counselor can help you weigh the benefits and disadvantages of the debt snowball method versus the debt avalanche method.
The debt snowball method involves paying off small debts first, then settling the bigger ones. Meanwhile, the debt avalanche method requires that you make minimum payments on your outstanding balance and use the remaining funds to pay off debts with higher interest rates.
Between these two methods, the first one may be more costly in the long run. You prioritize paying debts with as much money as possible while paying the minimum interest.
To know more about credit, finances, and other viable options to temporarily fund your treatment and other healthcare needs, consult a financial advisor or credit counselor.
- Total Household Debt Reaches $16.51 trillion in Q3 2022; Mortgage and Auto Loan Originations Decline
- Credit Counseling
- Debt Avalanche vs. Debt Snowball: What’s the Difference?