5 Alternatives to Charging Your Medical Bills

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Last year, I ended up in the hospital. The experience was scary, but what was even scarier were the massive hospital bills that started pouring in once I got home. I quickly exhausted my emergency savings and, out of options, I turned to my credit cards to pay the remaining bills.

It was a costly mistake. The high interest rates on my credit cards caused my balance to balloon, and I ended up paying back far more than I originally owed. It was a hard-learned lesson that cost me thousands.

If you're like me and facing serious medical bills, it's important to know that there are other options available to you that are less costly. If you need help, here's what you need to know before handing over your credit card.

The high cost of using credit

The cost of health care is a serious problem for millions of Americans. According to the Kaiser Foundation, 26 percent of U.S. adults say that they or someone in their household had problems paying for a medical bill in the past year, or couldn't pay their bills at all.

For some, an inability to pay means they will put off necessary treatments. For those who went to the hospital, they could leave with huge amounts of medical debt, causing them to fall behind on their other bills or even file for bankruptcy.

Many people turn to credit cards to pay the hospital bills, but doing so is an expensive decision.

According to Bankrate, the average credit card interest rates are currently hovering above 16 percent. That means that the bill you charge can grow significantly over time, adding hundreds or even thousands to your credit card balance.

For example, if you used a credit card to pay for a $5,000 medical bill at 16 percent interest with a $150 minimum payment, it would take you 15 years to pay off your card. You'd pay back over $3,700 just in interest charges, making it harder to get out of debt. As interest accrues, it's easy to end up over your head. (See also: The 5 Biggest Dangers of Credit Card Debt)

The things you can do instead

When you don't have enough money in the bank, a credit card might feel like your only option. However, there are other resources you can use to pay your medical bills that are more cost-effective than a credit card.

1. Enroll in a payment plan

Some hospitals and health care practitioners offer payment plans for low-income patients. With a payment plan, you can split up your bill over several months or even years. You can pay your bill a little at a time, rather than coming up with thousands at once.

Some hospital payment plans might not even charge you interest, or will charge a low rate, making them a much cheaper option than using a credit card. (See also: What to Do If You're Hit With a Huge Medical Bill)

2. Ask about charitable funds

If you can't afford your bills even with a payment plan, ask the hospital's billing department about any charitable funds. Some places have money they set aside to pay for treatment of patients who can't afford to pay the bill themselves.

There will likely be a significant amount of paperwork to complete, and you'll have to submit documentation of your income and expenses. However, spending time completing the forms can end up saving you thousands over the long run. (See also: How to Handle a Massive Medical Bill)

3. Explore outside nonprofit organizations

If your hospital doesn't offer any financial assistance, you might be eligible for aid from a separate nonprofit. Organizations like HealthWell, Catholic Charities, and the Children's Health Fund may be able to help you with your with medical bills. Some offer upfront cash assistance or will even help you negotiate a lower bill.

You can contact United Way's 2-1-1 Information & Referral hotline to find out about programs in your area.

4. Negotiate your bill

Depending on your circumstances, you might be able to negotiate a lower bill. If you cannot afford the total balance, call the hospital's billing department and explain your situation. Ask if they'd be willing to accept a lower amount. In some cases, the hospital may agree to settle the debt for less than you were originally billed. (See also: 7 Ways to Negotiate Medical Bills)

5. Consider a personal loan

If you've exhausted your other options and still need help paying your bill, consider taking out a personal loan rather than using your credit card. If you have good credit and a stable income, you could qualify for a loan with an interest rate as low as 5 percent. And, you could choose a longer loan term, making your payments more affordable. (See also: 5 Times Personal Loans May Be Better Than Credit Cards)

Exploring your options

Before reaching for plastic, make sure you have researched all of your available payment options. Using a credit card to pay for your medical bills can end up costing you thousands more than you originally owed. (See also: Never Use Your Credit Card to Pay for These 10 Things)

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