For most people who have credit card debt, the problem came from spending money on things they didn’t really need. Whether it’s buying clothes, cappuccinos, or a fancy new computer… often times, the purchases were not necessities.
However for me, the story is quite different. I’m extremely frugal, so shopping has never been a problem. 100% of my credit card debt was from medical bills.
When I was 18, I nearly died in a severe auto accident. While driving home from my grandma’s house one afternoon, I was broadsided by a delivery truck. This crushed my body, breaking just about everything from head to toe (literally).
The good news? I lived! After dozens of surgeries and many weeks in the hospital, I was on the road to recovery. But the bad news? Obviously healthcare is not cheap!
The auto insurance policy on the car I was driving did provide medical coverage, so the vast majority of bills I didn’t have to pay. However, there were still many medical expenses I had to pay. Due to the laws in the state where my accident took place, a lawsuit against the other driver wasn’t possible, so that meant all of the medical bills not covered by insurance I had to pay out of my very own pocket.
As you are well aware, insurance companies are very picky with what they pay out. For example, if you are getting a surgery, they might only offer to pay an amount they deem “customary and reasonable” and then the rest of it you will have to pay on your own. Then there are operations they may refuse to cover altogether, because they classify them as “experimental” or “not medically necessarily.”
This of course meant I had to come up with money to make up the difference. However, since the accident happened while I was so young, I had limited opportunities to earn a good income (I had no college degree). So my only option was to borrow money.
The most obvious option would be to get a medical loan, but they came with high interest rates and their 0% APR plans used deferred interest (so if you didn’t pay off 100% of the loan before the promotional period, you would be charged back interest). So instead, I decided to use 0% credit cards for balance transfers and purchases.
What I would do is apply for a credit card deal and use it to pay for the medical bill. Then when the 0% APR promotion ran out (say 12 months later) I would do a balance transfer to a new 0% APR deal on a different card. I like to keep private the amounts I did this with, but let’s just say it was a lot of money!
Keep in mind this was several years ago before the financial crash. Back then, even someone in their late teens or early twenties could get high credit limits. Nowadays this same strategy would never work, because credit cards now come with much lower limits and not even excellent credit scores are offered the deals that used to exist. This is probably a good thing, because what I did was very risky and I would definitely advise others to never attempt the same thing. Because of the healthcare reform, now U.S. citizens can buy health insurance with good coverage even if they have pre-existing conditions – I would recommend people do that instead, as well as bargaining down the medical bills.
So with no college degree, how did I end up earning enough to pay off this debt? Well ironically, the debt ended up being a blessing in disguise, financially speaking.
Because of my predicament, I started Credit Card Forum as a hobby. It was a place for myself and others to discuss credit card tips and tricks. On the forum, we would talk about things like how to negotiate interest rates and who had the best balance transfer credit cards.
I started the site back in ‘08. It has steadily grown since then and eventually, the advertisements I was running for credit card companies earned me enough money to pay off all of my debt! Furthermore, it has paid for my continued medical care and the operations I had put off in the past because I couldn’t afford them.
The lesson here is not that you should use credit cards to pay medical bills (you should not). Rather my point is that you never know what blessings may result from your hardships.
Byline: Michael Dolen is personal finance blogger. As mentioned above, Credit Card Forum is the site he originally started several years ago and today it is his full-time job. He earns money with it by reviewing the best no fee 0% APR balance transfers and other credit card deals. Fortunately nowadays, he no longer has to use balance transfers and instead, uses credit cards for their cash back and other benefits.
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