It is common for pet owners to use an available credit source along with a pet insurance policy to help them manage their pet’s healthcare expenses. One such credit source is CareCredit, a health credit card. They offer 6 and 12 month “no-interest” payment plans. This allows the pet owner to file a claim and get reimbursed before the credit card balance is due.
Here are some tips (based on my conversation with a company representative) when using CareCredit (any interest rates mentioned are accurate as of 10/2010 and subject to change, so be sure and ask the company for current rates):
1) Even if you don’t think you have good enough credit to qualify, apply anyway. I’ve had some clients who were pleasantly surprised when they were approved. You can apply over the phone (1-800-365-8295) or over the internet (CareCredit) . You can also have a co-applicant on your account (sort of like a co-signer) that could increase your chances of approval. They will let you know within minutes whether you are approved and what your credit limit is (up to $25,000 based on creditworthiness). They will give you an account number that you can use immediately until you get your actual card in the mail. It is best to go ahead and apply before you actually need it.
2) You should check with your veterinarian, local emergency center and/or specialty hospital to see if they accept CareCredit. It is becoming more commonly accepted. Other healthcare facilities (e.g. dental, vision, etc.) may also accept your CareCredit card.
3) They also offer extended payment plans of 24 to 48 months on treatment fees over $1000 and 60 months on treatment fees over $2500. Currently, the fixed interest rate for these plans is 14.9%. If you default on one of these plans, the interest rate increases to 29.9%.
4) If you fail to pay off your “no-interest” plan by the end of the promotion period, you will be assessed a 26.9% rate from the date of purchase and until you pay the balance off. If you are late making a payment and/or default on the loan, the interest rate will increase to 26.9% - 29.9%. You can make extra payments to your promotional balance at any time without penalty. I was told that the extra payment would go toward the promotion expiring first.
5) Since it is possible to have multiple promotions going on at once, you will want to keep in touch with the company to make sure that each one is paid off before the promotion offer expires. Otherwise, you will owe the above huge interest charges in addition to the loan amount. The bottom line is that while CareCredit can be a great tool to use with pet insurance, you must use it responsibly – that is, avoiding the high interest charges if you fail to pay off the balance before the “no-interest” term expires, are late with a payment, or default on the loan.
6) Although you can use your CareCredit card for both large and small purchases, my advice would be to use it only for those large, unexpected purchases so that you don’t have multiple promotions going on at the same time. The more promotions you have going on, the greater the likelihood of losing track of them and ending up having to pay large interest charges on top of the original purchase.
