Becky House, Education Manager and credit expert at American Financial Solutions , offers tips and best practices for medical debt consolidation . Adding the debt to a credit may be tempting, but it may also cause unnecessary financial burdens.
Seattle, Washington (PRWEB) January 12, 2012
Know the Debt Ratio
One thing to consider when using a credit card to consolidate debt from medical bills is the amount of available credit remaining on the credit card. A significant factor of a consumer credit score is how much debt they have compared to their available credit limit. The ideal ratio is 30%. This means that at any given time someone should only be using 30% of their credit line or it will begin to negatively impact their score.
Know the Monthly Payments
Another consideration, before consolidating medical debt on credit cards, is the monthly minimum payments on the credit card. The reason for putting medical bills on a credit account is typically to make the amount of debt more manageable to repay, so consumers need to ensure that the new payment on their credit card is something they can afford.
Also, be sure to make all payments on credit cards on time. Missing payments can cause late fee penalties, an increase in interest rates, or both. It is important for people to review their budget and use an online calculator to estimate what their new payment would be. American Financial Solutions has a credit card calculator available online at under the AFS Education Resources tab.
Know About Other Resources
When deciding whether to pay the medical debt with a credit card, consider what other resources may be available to help pay the bill. These may include:
1. Developing a payment plan with the medical provider. Ask the provider if they will accept payments rather than one lump sum. Explain your financial situation and only promise to pay what you truly can afford. For instance, if you know you cannot send $200 a month, let them know how much you can send and be sure to follow through.
2. Negotiating the price of the medical treatment
Click here to view rest of article from original site
|
|
|
