My Healthcare Bills Will Get Me Free Hotel Stays. Here's How

It's an unfortunate fact that even if you have medical insurance, you still need to shell out money for your healthcare bills. This might be due to needing to pay for all care yourself until you reach your policy deductible, maxing out your coverage (in the case of dental insurance), or seeing an out-of-network specialist that your insurer doesn't cover in full.

In any case, you've got to find the money for those bills, and judging from how much Americans owe in medical debt ($220 billion, according to KFF), this is an extremely common issue.

You've got options to cover your healthcare bills, and assuming you have the ability to cover them with cash from your bank account, you might want to make the payments using a credit card. This is my strategy, and here's why.

I can earn Chase Ultimate Rewards points

Not too long ago, I started making an effort to pay more of my bills via credit card, for a few reasons. Using a credit card and then paying off the charges every month is a great way to build and maintain a solid credit score. Credit cards also make it easier to keep track of what you're spending. And using a rewards or cash back credit card is a great way to benefit financially from the bills you'd have to pay anyway.

I've started using my Chase Freedom Unlimited® card to pay my medical bills, as well as my pricey monthly health insurance premium. I'm using this card specifically because it's the best flat-rate earner I've got -- it earns 1.5% cash back, and that is earned as Chase Ultimate Rewards points. The Chase Freedom Unlimited® isn't a travel credit card, but I also have the Chase Sapphire Preferred® Card, which is. So I can transfer the points from the Chase Freedom Unlimited® to it. Then I get to translate that cash back into free hotel stays (or other travel) booked through the Chase Travel portal or via one of Chase's travel partners.

I didn't love having to shell out several thousand dollars at the dentist in January (with more to come), but I was at least comforted by the impending benefit. I've been fortunate enough to travel more lately, and it's fun to log into my Chase account, see my points balance, and search for an upcoming travel destination. Then I can review my options for hotel rooms in cities I'm planning to visit.

A caveat for medical bills and credit cards

All this sounds pretty sweet, right? Well, it would be remiss of me not to urge caution if you decide to follow my lead here. It's not a great idea to charge medical bills on a credit card if you'll need to carry the balance forward (with one exception; see below).

Credit card debt can derail your personal finances in a serious way, due to the high interest rates charged. According to the Federal Reserve Bank of St. Louis, the average interest rate on a credit card as of November 2023 was 21.47%. At that rate, if you put a $5,000 medical bill on a credit card and aim to pay it off with $100 monthly payments, it'll take you 122 months (or over 10 years) to pay off -- and you'll pay $7,160 in interest in the process.

Another problem with putting medical bills on a credit card is turning medical debt into credit card debt. Thanks to recent changes in credit reporting laws, medical debt that has been sent to a collection agency and amounts to less than $500 (and is less than a year old) may no longer count against your credit. But if you're struggling to pay a medical bill and put it on a credit card that you then struggle to pay off, you could end up with credit score damage as a result.

How else can you handle a medical bill?

You have some options here. Medical credit cards exist, but they're not all that great. A better credit card option for medical bills is a card with an introductory 0% APR, because you'll have a period (often a year or longer) to make payments without incurring interest. Just run the math to see how much you'll need to pay on the balance every month to ensure you won't end up owing interest.

A better option, though, is to explore payment plans through your medical provider. You may still be charged interest in this instance, but it's likely to be less than you'd pay on a credit card if you had to carry the balance forward. Similarly, a personal loan could also be a good, lower-interest way to cover a medical bill.

If you are able to take advantage of credit card rewards when paying for healthcare, it can be a silver lining for those medical bills. Just be careful with interest.