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Dollar Savings Direct Review

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It may not have been previewed, commissioned or otherwise endorsed by any of our network partners.

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Opening an account

You can open a Dollar Savings Account™ online by providing your basic information, like your tax identification number and your address. Customers have to be age 18 or older. And you have to have a personal checking account with a US Bank that you can link to your new Dollar Savings Account. To open an account, you need to transfer at least $1.00 from your current bank.

If your online application is approved, you will be able to log into your account and view your balance immediately. However, DollarSavingsDirect needs more information, it will contact you within a few business days. The initial deposit amount will not be available to you for five business days after opening the account, or 10 days if you fund the account via check.

Funding your account

A linked checking account can be used to fund your new Dollar Savings Account. You can also choose to fund your account with a physical check by mail, but in that case you won’t have access to your funds for 10 business days.

If you want to open an account with a check, you must select this option during the application process. Then you will receive instructions about where to mail your check. Your check must be written from your linked checking account. Checks are only accepted for your initial deposit, after which making any future deposits or withdrawals is via electronic transfer, or Automated Clearing House (ACH) transfer.

An initial minimum deposit of $ is required to open your Dollar Savings Account, after which no minimum balance is needed to maintain the account. However, a minimum balance of $1,000 is required after the account has been established in order to earn the APY disclosed (at the time of publishing).

Accessing your money

After you’ve opened and funded your Dollar Savings Account, you can transfer funds electronically in or out by logging into your account online. Online access is available 24 hours a day, seven days a week. However, you may feel disappointed by the digital experience offered by Emigrant Bank and its subsidiaries, including Dollar Savings Direct. There is no mobile app you can use to access your account easily, and the website itself has a dated look and feel.

Keep in mind that your Dollar Savings Account is subject to the Federal Reserve Board’s Regulation D, which mandates certain types of telephone and electronic withdrawals, including transfers from savings accounts up to 6 per statement cycle. If you make more than the amount mandated by Federal Law, your bank may charge you a fee, convert your account to a checking account or simply close it.

If you funded your account with a check, there is a 10-business-day hold before you may withdraw your funds. All electronic transfers, or ACH deposits, have a five-business-day hold, no matter if it’s your initial deposit or a future deposit.

After you initiate your withdrawal online, it can take from two to four business days for the funds to appear in your connected external checking account. It will also take the same amount of time to transfer money into your Dollar Savings Account.

Why DollarSavingsDirect  may not be the best choice

DollarSavingsDirect offers the Dollar Savings Account with no minimum deposit required and no fees or service charges. This, combined with a solid APY, makes the account seem like an attractive option to new customers.

However Emigrant Bank, the parent of DollarSavingsDirect, has a habit of using high interest rates to attract new customers and deposits to its sub-brands before lowering the rates significantly once they’ve achieved their goals. In their websites account disclosures, you will find the phrase “The Bank, at its sole discretion, may change the APY and interest rate on the Account at any time.”

DollarSavingsDirect and Emigrant Bank, along with any other bank, are within their legal rights to change the APY on savings accounts at any time. If you can find a bank with more transparent pricing practices, you may be better suited — even if the APY is lower. That’s because as a general principle, a more stable APY will generate more interest over the lifetime of an investment.

If you do decide to open a Dollar Savings Account, keep an eye on the interest rate over time. You may want to withdraw your funds and store them elsewhere if rates drop significantly, as they have done historically.

Competitors to consider

Luckily, there are plenty of other high-yield online savings accounts that tend to have more stable — and even higher — interest rates. Here are a couple to consider:
High Yield Savings from Synchrony Bank
Synchrony Bank, a direct competitor to DollarSavingsDirect, has a savings account with a stellar APY. It also offers an account without a minimum balance or monthly fees. Plus, you can also get an ATM card to access your funds. Synchrony Bank has a mobile app, which makes monitoring your savings a breeze.
Online Savings Account from Ally Bank
Another top competitor is Ally Bank. Ally offers a good APY with no minimum balance required. It also offers a free checking account (also without a minimum balance requirement), which makes it even easier to manage your money all in one place. Ally also has a stellar app that should cover everything you need.

SEE DETAILS Secured

on Ally Bank’s secure website

Member FDIC

Bottom line

It’s tough to beat the high APY on a savings account that DollarSavingsDirect offers. However, sticking with an account that offers a slightly lower APY — but is more consistent with the interest rate — would make it easier to manage getting the best return on the money in a savings account. Alternatively, you could choose a bank from the options above, which outpace DollarSavingsDirect in every way including the one that really matters: APY.

If you open a Dollar Savings Account, you’ll want to keep a constant eye on the rate, knowing that it may drop significantly in a few months, based on some of Emigrant Bank’s past practices. Most banks will vary their APY to some degree, but not as non-linearly as Emigrant Bank seems to do. Also, if you are unable to transfer funds out of your Dollar Savings Account when the rate drops, the advantages of opening a high-yield savings account will be lost almost entirely.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

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Reviews

Review of State Farm Bank Rates

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It may not have been previewed, commissioned or otherwise endorsed by any of our network partners.

Written By

State Farm CD rates

Regular CDs

CDs from State Farm Bank don’t offer the highest rates available, and with a somewhat complex early withdrawal fee policy, you can likely find a better place to keep your money in a CD.

Term

Less than $100,000

$100,000+

12 months

0.25%

0.25%

24 months

0.25%

0.25%

30 months – special term

0.25%

0.25%

36 months

0.25%

0.25%

48 months

0.25%

0.25%

60 months

0.25%

0.25%

  • Minimum opening deposit: $500
  • Minimum balance amount to earn APY: $500
  • Early withdrawal penalty: If you make a principal withdrawal within six days of your initial deposit, or within six days of your previous withdrawal, the penalty is seven days’ interest. For all other principal withdrawals, the penalty will be the greater of a minimum of $25 or:
    • 90 days of interest for a CD term of 11 months or less
    • 180 days of interest for a CD term of 12 to 23 months
    • 365 days of interest for a CD term of 24 to 47 months
    • 545 days of interest for a CD term of 48 months or greater

We like that the account minimum is low at only $500, which makes it easy to get started with little money. Another benefit is that interest compounds daily and can be added to the CD, paid out to you by check, or deposited into a State Farm Bank account.

However, rates are low compared to many other banks’ CD products, and the complex early withdrawal penalty makes it less attractive if you’d have to withdraw your funds early for any reason.

If you decide to use this product, make sure you invest money that you likely will not need to access during the time that it is invested. Also, you have to move quickly when your CD matures if you want to withdraw your funds without a penalty — there is only a 10-calendar-day grace period after which the CD will automatically renew.

How to get State Farm’s CDs

You can apply for an account directly on State Farm’s website. To be eligible, you must have a Social Security Number, Tax Identification Number, or Individual Taxpayer Identification Number. Minors may open a CD and be listed as the primary or secondary account holder; however these accounts must be opened through a State Farm agent or by phone.

SEE DETAILS Secured

on State Farm Bank’s secure website

Member FDIC

Coverdell Education Savings Account (ESA) CDs

If saving for your child’s education is important to you, you might consider using a Coverdell ESA. Contributions are not tax deductible, but funds will grow tax-free until distributed. Plus, the earnings are used for qualified education expenses, they can be withdrawn tax-free.

Coverdell ESA funds can be invested in a CD or in mutual funds. CD rates are listed in the table below.

Term

APY (Less than $100,000)

APY ($100,000+)

12 months

0.25%

0.25%

24 months

0.25%

0.25%

30 months – special term

0.25%

0.25%

36 months

0.25%

0.25%

48 months

0.25%

0.25%

60 months

0.25%

0.25%

  • Minimum opening deposit: $500
  • Minimum balance amount to earn APY: $500
  • Early withdrawal penalty: If you make a principal withdrawal within six days of your initial deposit, or within six days of your previous withdrawal, the penalty is seven days’ interest. For all other principal withdrawals, the penalty will be the greater of a minimum of $25 or:
    • 90 days of interest for a CD term of 11 months or less
    • 180 days of interest for a CD term of 12 to 23 months
    • 365 days of interest for a CD term of 24 to 47 months
    • 545 days of interest for a CD term of 48 months or greater

Coverdell ESA CD rates are the same as traditional CD rates. The only difference is that these funds are to be used for educational expenses for students.

The contribution maximum is $2,000 per student per year up to age 18, even if multiple accounts are opened for the same student. This means if you open account for your child and your parents open an account for your child, the combined maximum is still $2,000 per year.

There is also a modified adjusted gross income cap of $95,000 for single tax filers and $190,000 for married filing jointly, after which only a partial contribution can be made to a Coverdell ESA. If your modified adjusted gross income is above $110,000 for single tax filers, or $220,000 for married filing jointly, you are not eligible to contribute to a Coverdell ESA.

Distributions from a Coverdell ESA don’t have to be reserved for college expenses. Any educational expenses for kindergarten through grad school may qualify. Qualified expenses include things like:

  • Tuition and fees
  • Academic tutoring
  • Books, supplies, and equipment
  • Room and board
  • Uniforms
  • Transportation
  • Computers and technology

Coverdell ESA funds can also be invested in mutual funds instead of CDs. Mutual funds may offer higher interest rates, depending on which funds are selected.

How to get State Farm Bank’s Coverdell Education Savings Account (ESA) CDs

An ESA can be opened by anyone, including the child for whom the funds are being saved, as long as their modified adjusted gross income falls without the limits outlined above. The combined total per year cannot exceed $2,000. There is no limit to the number of accounts that can be established for one student.

If funds contributed exceed $2,000, they must be withdrawn before June 1 of the following tax year. If they aren’t, the funds will be subject to a 6% excise tax, which will be reported on the child’s tax return each year that the excess funds remain in the account.

To open an account, call State Farm Bank at 1-877-734-2265.

SEE DETAILS Secured

on State Farm Bank’s secure website

Member FDIC

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How State Farm’s CD rates compare

While State Farm Bank offers a low minimum account deposit to open a CD, better CD rates can be found elsewhere. We’d suggest shopping around to find a higher interest rate CD, or investing your money in a different type of account.

State Farm’s IRA accounts

IRA CD rates

State Farm Bank’s IRA CD has a low account minimum of only $500 and also offers both a traditional and Roth plan. Interest is compounded daily, but rates are low compared to what is available from other banks.

Term

APY

12 months

0.25%

24 months

0.25%

30 months Special Term

0.25%

36 months

0.25%

48 months

0.25%

60 months

0.25%

  • Minimum opening deposit: $500
  • Minimum balance amount to earn APY: $10. If you’re age 59 ½ or older and are taking normal distributions, the account balance may fall below the minimum opening balance. However, it cannot fall below $10.
  • Early withdrawal penalty: If you’re age 59 1/2 or older, normal distributions are allowed without an early withdrawal penalty. However, if you want to transfer funds to a different IRA, withdrawals will be subject to early withdrawal fees. If you make a principal withdrawal within six days of your initial deposit, or within six days of your previous withdrawal, the penalty is seven days’ interest. For all other principal withdrawals, the penalty will be the greater of a minimum of $25 or:
    • 90 days of interest for a CD term of 11 months or less
    • 180 days of interest for a CD term of 12 to 23 months
    • 365 days of interest for a CD term of 24 to 47 months
    • 545 days of interest for a CD term of 48 months or greater

Like other CD products with State Farm Bank, you can withdraw interest earnings without penalty. Another nice benefit with this retirement investing account, you are also eligible to withdraw a portion of your original deposit as a normal distribution without penalty if you are over age 59 1/2. Keep in mind that any interest payments withdrawn will be considered distributions and taxes and IRS penalties may apply if you are under age 59 1/2.

However, one drawback with this account is that you can’t easily access your balance information online, and there are no electronic statements available.

How to get State Farm’s IRA CDs

To open an account, call State Farm Bank at 877-734-2265.

You can open your account with $500 or more and select either a Traditional or Roth plan with terms between 12 and 60 months.

The contribution limit for 2018 is $5,500, or 100% of your earned income, whichever is less. If you are over age 50, you can contribute an additional $1,000 per year.

There are also limits to the amount you can deduct from your taxes based on your adjusted gross income. These limits are based on federal law.

SEE DETAILS Secured

on State Farm Bank’s secure website

Member FDIC

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How State Farm’s IRA CD rates compare

Rates for State Farm’s IRA CD rates aren’t the highest on the market. There are other banks that offer better IRA CD rates so you can earn more interest on your money. One nice benefit that may not be available at all banks is that interest is compounded daily at State Farm Bank.

IRA Money Market Account

Investing in an IRA Money Market account with State Farm Bank may be easier than using their IRA CD product because you can electronically contribute a portion of each paycheck into your Money Market account. Plus, there’s no time commitment required for your investment.

Minimum balance amount

APY

$100 - $9,999

0.05%

$10,000 - $24,999

0.05%

$25,000 - $49,999

0.05%

$50,000 - $99,999

0.05%

$100,000 - $249,999

0.05%

$250,000 - $24,999,999

0.05%

$25,000,000+

0.05%

  • Minimum opening deposit: $1,000
  • Minimum balance amount to earn APY: $100
  • ATM fee: None
  • ATM fee refund for foreign transactions: Up to $10
  • Overdraft fee: $25 maximum of 3 per day

With State Farm Bank’s IRA Money Market Account, there is a minimum deposit of $1,000 required to open your account. However, if you take distributions, your account balance may fall to less than $1,000. The minimum balance required to earn interest is $100; however if your average daily balance is less than $500, you will be charged a minimum balance fee of $10.

Withdrawals from this account prior to age 59 1/2 may be subject to IRS penalties. Plus, you must give at least seven days notice before making any transfers or withdrawals from your account.

Interest on this account compounds daily but is only added to your account balance monthly.

You are only allowed to make six transfers from your account each month by phone or mail, otherwise you may be subject to an excessive transaction fee of $10. State Farm also has the right to refuse transactions after you’ve hit the limit, or even close your account. You can make unlimited withdrawals by mail or telephone.

How to get State Farm’s IRA money market account

To open an account, call State Farm Bank at 877-734-2265.

To be eligible, you must be at least 18 years old. IRA money market accounts can only have one owner.

SEE DETAILS Secured

on State Farm Bank’s secure website

Member FDIC

State Farm’s checking account options

Interest Checking

Although the minimum amount required to open a State Farm Bank Interest Checking account is only $100, you must maintain an average daily balance of $500 in order to avoid a minimum balance fee. In addition, your account must have a balance of $2,500 in order to earn the stated interest rates.

Minimum deposit amount

APY

$0 - $2,499

0.00%

$2,500+

0.05%

  • ATM fee: None.
  • ATM fee refund for foreign transactions: Up to $10
  • Overdraft fee: $25, maximum of 3 per day. Overdraft protection is $3 for a transfer from another State Farm Bank account.

You can’t just deposit $100 to open your account and begin earning interest. In fact, if you only deposit $100 to open your account, you will be subject to a minimum balance fee of $10 if your average daily balance isn’t at least $500.

Plus, if you want to earn interest on your money, you have to have a balance of at least $2,500, significantly more than the minimum required to open the account, or even the minimum required to avoid the minimum balance fee. If you don’t read the fine print, this can be misleading.

There are much better options for interest bearing checking accounts with higher APYs and lower minimum balance requirements.

How to get State Farm’s Interest Checking account

You can apply for an account online in only 10 minutes. You must have a Social Security Number, Tax Identification Number, or Individual Taxpayer Identification Number in order to apply.

There must be at least one account holder that is age 18 or older. Minors may be account holders, but you must open an account with a State Farm agent or by phone.

SEE DETAILS Secured

on State Farm Bank’s secure website

Member FDIC

Regular Checking

The requirement to open a regular checking account is much lower, plus there are no minimum balance fees to contend with.
  • Minimum deposit amount: $25
  • ATM fee: None.
  • ATM fee refund for foreign transactions: Up to $10
  • Overdraft fee: $25, maximum of 3 per day. Overdraft protection is $3 for a transfer from another State Farm Bank account.

While this account doesn’t earn any interest, we like that there are essentially no fees if you don’t overdraw your account. It also has handy features like mobile check deposit and a mobile banking app. You can also get account alerts by text or email.

It may be a good option for those who aren’t able to meet the minimum balance requirements for State Farm Bank’s Interest Checking account.

However, there are still plenty of online banks that offer interest-bearing checking accounts with no or low minimum balance requirements. You may as well be earning interest on your money with an online bank if you can.

How to Get State Farm Bank’s Regular Checking Account

You can apply for a regular checking account online on State Farm’s website in only a few minutes.

To be eligible for a checking account, you have to have a Social Security Number, Tax Identification Number, or Individual Taxpayer Identification Number. There can be multiple account holders listed, but at least one of them must be 18 years or older. If the account will have a minor listed, it must be opened over the phone or with a State Farm agent.

SEE DETAILS Secured

on State Farm Bank’s secure website

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How State Farm’s checking accounts compare

Compared to these interest-bearing checking accounts with several online banks, there’s no way State Farm Bank can be competitive. Their account minimums are much higher in order to earn interest. Even then, the amount of interest earned with State Farm is significantly lower than other banks.

We suggest checking out other options besides State Farm if you want to earn interest on your checking account.

State Farm Bank’s savings account options

Consumer Savings Account

The interest rate on State Farm’s Consumer Savings Account may be higher than some brick-and-mortar banks, but it can’t compete with online savings options.

Minimum balance amount

APY

$0 - $9,999

0.05%

$10,000 - $24,999

0.05%

$25,000 - $49,999

0.05%

$50,000 - $99,999

0.05%

$100,000 - $249,999

0.05%

$250,000 - $24,999,999

0.05%

$25,000,000+

0.05%

  • ATM fee: None.
  • ATM fee refund for foreign transactions: Up to $10
  • Overdraft fee: $25, up to 3 per day. Eligible for $3 overdraft protection from a linked State Farm Bank account.

The minimum deposit to open a savings account is $100. If the main account holder is over age 18, there is a minimum balance requirement of $100; if the balance falls below $100, a $3 fee will be charged.

This could be a good starter savings account for those under age 18 who are looking to earn a little interest on their money, especially since there’s no minimum balance fee for main account holders under age 18. That said, there are other online savings accounts with much higher interest rates available.

How to get State Farm’s savings account

A savings account can be opened online if you are over age 18 and a minor won’t be listed as an account holder. However, if a minor will be an account holder, you must open the account by phone or by working with a State Farm agent.

To be eligible for a State Farm savings account, you have to have a Social Security Number, Tax Identification Number, or an Individual Taxpayer Identification Number.

SEE DETAILS Secured

on State Farm Bank’s secure website

Member FDIC

Health Savings Account (HSA)

Having a HSA is a nice option for State Farm Bank customers; however, higher interest rates can be found elsewhere.

Minimum balance amount

APY

$0 - $2,499

0.05%

$2,500 - $9,999

0.15%

$10,000+

0.40%

  • Annual fee: $25
  • ATM fee: None
  • ATM fee refund for foreign transactions: None

An HSA can be a good way to get tax benefits and earn a little interest at the same time. State Farm’s HSA works essentially like a checking account, but it’s only to be used for qualified medical expenses.

There is no minimum balance fee associated with this HSA account, and after opening, you can make deposits at any time. There is an annual fee of $25 on the first anniversary of your account opening and every year thereafter.

Having an HSA can be a good idea, but you can likely find one with a better interest rate.

How to Get State Farm’s HSA

If you want to open an HSA with State Farm, call 877-734-2265. There is no option to apply online.

By federal law, you can only use an HSA in combination with a high-deductible health insurance plan.

SEE DETAILS Secured

on State Farm Bank’s secure website

Member FDIC

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How State Farm’s savings accounts compare

While it is a good idea to have a savings account, you can earn more interest on your savings by using a different institution. Savings interest rates with State Farm are low, especially when compared to online savings accounts.

State Farm Bank’s Money Market account

Consumer Money Market Account

If you’re new to State Farm Bank, this is the best way to earn extra interest on your initial account opening and deposit. There is an introductory interest rate of 2.00% (1.17% APY) for your first deposit up to $249,999.

Minimum balance amount

APY

$0 - $9,999

0.05%

$10,000 - $24,999

0.05%

$25,000 - $49,999

0.05%

$50,000 - $99,999

0.05%

$100,000 - $249,999

0.05%

$250,000 - $24,999,999

0.05%

$25,000,000+

0.05%

  • ATM fee: None.
  • ATM fee refund for foreign transactions: Up to $10
  • Overdraft fee: $25, up to 3 per day. Eligible for $3 overdraft protection from a linked State Farm bank account

A State Farm Money Market Savings account will help you earn more interest than a traditional savings account with State Farm. If you have the funds available to do a large introductory deposit, you can earn extra interest versus depositing smaller amounts over time because of State Farm’s special introductory offer.

The minimum amount required to open an account is $1,000. However, if you withdraw a portion of your funds later, keep in mind that there is a minimum balance fee of $10 that will be imposed if the average daily balance is below $500.

Like other savings accounts, there is a limit of six transfers from your account each month, including automatic transfer, bill pay, etc. If you go beyond six transfers, State Farm has the right refuse your transaction or even shut down your account. You may also be subject to a $10 fee for excessive transactions. There is also a requirement that you must provide written notice at least seven days before any withdrawal or transfer from the account.

How to get State Farm’s Consumer Money Market Account

You can apply for an account online. To be eligible, you must have a Social Security Number, Tax Identification Number, or Individual Taxpayer Identification Number. One account owner must be over age 18. If a minor will be an account owner, the account must be opened over the phone or via a State Farm agent.

SEE DETAILS Secured

on State Farm Bank’s secure website

Member FDIC

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How State Farm’s money market account compares

While the regular rates on State Farm’s Money Market Savings are not as high as the special introductory rate, they’re much higher than with State Farm’s regular savings account. However, there are still higher money market rates available at other banks. We think it’s a good idea to shop around for a better rate.

Overall review of State Farm banking products

State Farm does have decent terms and interest rates on their products, but they’re certainly not the lowest rates on the market. However, if your main concern is getting the most interest for your money, we recommend finding another bank to house your funds. State Farm is consistently outperformed by other banks that offer higher rates and similar (if not better) terms.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Advertiser Disclosure

Reviews

What You Should Know Before Using CareCredit to Pay for Medical Expenses

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It may not have been reviewed, approved or otherwise endorsed by the credit card issuer. This site may be compensated through a credit card issuer partnership.

Written By

Reviewed By

Source: iStock

It’s no secret that medical expenses can be very costly in the United States. Since 2011, average family insurance premiums, even for people with employer-provided plans, have increased by 20 percent.

With out-of-pocket health care costs and insurance premiums skyrocketing, many people are turning to credit cards designated for medical expenses like CareCredit to help them pay for health care expenses over time.

But before you sign up for CareCredit to cover your next medical bill, here’s what you need to know.

A warning about those 0% financing offers

CareCredit is a credit card you can use at any of more than 200,000 health and wellness providers in the United States — from doctor’s offices to drugstores like Rite Aid.

Why turn to CareCredit instead of a regular credit card for medical expenses?

The biggest draw is the company’s frequent 0% financing specials for six to 24 months on qualifying purchases $200 or more, when you make the minimum monthly payments and pay the full amount due by the end of the promotional period.

The opportunity to put approved medical expenses on a 0% credit card and breathe easy for up to two years has huge appeal. But there’s one big caveat everyone should understand when it comes to CareCredit — deferred interest.

When you sign up for the CareCredit financing on a purchase of $200 to $999, deferred interest rate applies. This means that if you don’t have the full purchase paid off by the end of the promotional period, you will be charged retroactive interest at an APR of 26.99% from the date of your original purchase on the card. (We give an example of how the math works out below.)

Unfortunately, this is something customers could easily forget about, and it doesn’t help that the minimum monthly payment shown on your statement isn’t necessarily enough to get the entire balance paid off on or before the end of the special financing period. You should do the math yourself to make sure you’re paying enough each month to make the most of interest-free financing.

How CareCredit works

Now that you understand the risk that comes with a CareCredit account, let’s cover some of the details of what the company offers.

For larger purchases of $1,000 or more, CareCredit offers terms of up to 60 months with a reduced APR and fixed monthly payments until paid in full.

$200 to $999: Borrow at 0% for 6, 12, 18, and 24 months. Variable rate of 26.99% applies after promotional period ends.

$1,000 to $2,499: Borrow at 0% for 24, 36, or 48 months with an APR of 14.9%.

$2,500 and up: Borrow at 0% for 24, 36, 48, or 60 months with an APR of 16.9%.

How to apply

You can apply online on the CareCredit website or by phone at 1-800-677-0718. You can also apply at most health care providers’ offices if they are part of the network that accepts CareCredit to pay for services.

Like most credit card applications, you will need to supply your name, address, date of birth, Social Security number, net income and housing information. But unlike most credit card applications, you will also need to specify your doctor’s name and how you plan to use your CareCredit credit card if you aren’t applying in a doctor’s office. Once approved, you can use your CareCredit credit card again and again at participating health care providers.

CareCredit approvals are usually immediate, so you can find out right away if you can pay for your medical services with CareCredit. Synchrony, the bank that issues CareCredit, did not respond to phone and email requests for information on the credit standing needed to qualify for CareCredit.

What can CareCredit be used for?

As mentioned earlier, there are more than 200,000 enrolled providers that accept CareCredit in the United States. These include many different types of medical and health care providers and procedures, such as:

  • Chiropractic
  • Cosmetic
  • Dentistry
  • Hearing
  • LASIK and Vision
  • Primary and Urgent Care
  • Weight Loss
  • Health Care Specialists

You might even be able to use CareCredit to pay for veterinary care for your four-legged family members, if your veterinarian participates and accepts CareCredit in their office.

Fine print alert

While there’s no application fee or fee for using the special financing offered by CareCredit, there are still some things you need to watch out for.

The first, which we covered previously, is the high interest rate charged if you don’t pay your balance off in full by the end of the promotional period. The interest rate of 26.99% is very high, and as mentioned, it will be charged in arrears from the time you made your purchase.

For example, if you charge $1,200 to your CareCredit at 0% for six months and only pay the minimum payment each month (between $39 and $33), your balance will be $982 at the end of the six-month period, plus accrued interest of $152, totaling $1,134. If you continue making only the minimum payment, it will take you 96 months (eight years) to pay off your balance and cost you $2,693. However, if you paid $200 a month, you’d pay off the $1,200 bill within six months at no extra cost.

Source: CareCredit

The late payment fee for CareCredit can be up to $38. Plus, paying late even once may result in you losing your promotional 0% interest rate.

Who is CareCredit best for?

Because of the fact that CareCredit will charge interest from the time of your purchase if your balance is not paid in full by the end of a promotional period, the only time you should use CareCredit to finance your medical costs is if you are 100 percent certain you can pay it off within or before the end of that time frame.

This might be a good idea if you have already saved up the cash for a medical procedure and you can continue earning interest on it in your savings account. By earning interest on your savings and paying 0% interest with CareCredit, you can actually save money on your medical bill. This could still be risky: You never know if something might happen that could cause you to no longer be able to afford to pay off your CareCredit balance as you had planned.

Alternatives to CareCredit

Ask the billing department for a payment plan

Many health care providers offer patients no-interest payment plans, but you may not know about it unless you ask. Tell the billing department what you can afford to pay monthly and see what your options are for spreading out the cost of your treatment.

Use your emergency fund

If you know you incur a lot of medical bills or don’t want to rely on credit when they come around, make saving for medical expenses or adding to your emergency fund part of your regular budget. That way, if an emergency happens, you’re much less likely to go into debt paying for it.

Open a credit card with 0% financing for purchases or balance transfers

There are many credit cards available with 0% interest rates from six months to 21 months that don’t require you to pay off your purchase in full to avoid interest from back when you first made the purchase. Even if you can’t pay off the entire purchase before the end of the 0% interest period, you could try doing a balance transfer to keep your interest rate low, but even if you leave your balance on that credit card, it probably has a lower interest rate than the 26.99% offered by CareCredit.

Here are some of your best options for a 0% credit card:

Chase Freedom®

The information related to Chase Freedom® has been independently collected by MagnifyMoney and has not been reviewed or provided by the issuer of this card prior to publication.

Chase Freedom®

Regular Purchase APR
14.99% to 23.74% Variable
Intro Purchase APR
0% Intro APR on Purchases for 15 months
Intro BT APR
0% Intro APR on Balance Transfers for 15 months
Annual fee
$0
Rewards Rate
Earn 5% cash back on up to $1,500 in combined purchases in bonus categories each quarter you activate. Enjoy new 5% categories every 3 months. Unlimited 1% cash back on all other purchases.
Balance Transfer Fee
3% when you transfer during the first 60 days of account opening, with a minimum of $5
Credit required
good-credit

Excellent/Good

Take out a personal loan

If you can qualify for a personal loan with a low interest rate, you’ll have fixed monthly payments, and you may be able to extend them longer than the terms offered by CareCredit. We’ve rounded up some of the places you can get the best personal loan rates online, and you can read about them here.

LendingTree
APR

As low as 3.49%

Credit Req.

Minimum 500 FICO®

Terms

24 to 60

months

Origination Fee

Varies

SEE OFFERS Secured

on LendingTree’s secure website

LendingTree is our parent company

Advertiser Disclosure

LendingTree is our parent company. LendingTree is unique in that you may be able to compare up to five personal loan offers within minutes. Everything is done online and you may be pre-qualified by lenders without impacting your credit score. LendingTree is not a lender. Terms Apply. NMLS #1136.



As of 17-May-19, LendingTree Personal Loan consumers were seeing match rates as low as 3.49% (3.49% APR) on a $10,000 loan amount for a term of three (3) years. Rates and APRs were based on a self-identified credit score of 700 or higher, zero down payment, origination fees of $0 to $100 (depending on loan amount and term selected). Terms Apply. NMLS #1136

Don’t get caught at the checkout counter at your doctor’s office and end up making the wrong decision. Make sure you’ve carefully considered your options before you decide if you want to sign up for CareCredit to pay for your medical costs.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.