Best credit cards to pay your medical bills with

While no one likes discussing medical bills, it’s something we’ll have to deal with them at some point in life. Whether it’s something as serious as a life-saving surgery or something more benign like lasik, these big-ticket expenses are usually in the four- to five-digit range. 

This then begs the question: what’s the best credit card to use for such pocket-burning expenses?

How are medical transactions coded?

The first thing we need to do is pin down exactly what kind of medical treatment we’re talking about. There’s a wide range of possibilities, ranging from hospitals to dentists, physiotherapists, optometrists and every manner of medical care.

Here’s the range of Merchant Category Codes (MCC)* that medical transactions can come under:

• MCC 8011: Doctors & Physicians (Not Elsewhere Classified)
• MCC 8021: Dentists and Orthodontists
• MCC 8031: Osteopaths
• MCC 8041: Chiropractors
• MCC 8042: Optometrists and Ophthalmologists
• MCC 8049: Podiatrists and Chiropodists
• MCC 8050: Nursing and Personal Care Facilities
• MCC 8062: Hospitals
• MCC 8071: Medical & Dental Laboratories
• MCC 8099: Medical Services and Health Practitioners (Not Elsewhere Classified)

*An MCC is a four-digit code that card associations like Visa and Mastercard use to classify a merchant’s primary line of business.

Why the MCC matters is because banks may explicitly exclude credit card rewards for a specific MCC, so knowing the MCC beforehand can help you select the right card. If you’re in doubt about the MCC of a specific merchant, you can try using the Visa Supplier Locator to look it up. 

In general, you should not run into issues with any of the above MCCs, except MCC 8062. Go ahead and swipe your usual card when you visit the dentist or get a new pair of lenses made at the optometrist – you’ll earn rewards as per normal. 

The problematic one is MCC 8062, which covers polyclinics and hospitals (both private and public).

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Such institutions usually pay a discounted processing fee, which means transactions are less profitable for the bank and payment processing company. As such, some banks have excluded these transactions from earning miles, points or cashback. 

Which credit cards earn rewards for MCC 8062?

Here’s what I’ve put together from going through the T&Cs of various banks. Unfortunately, a growing number of banks now exclude MCC 8062 from earning rewards, regardless of whether it’s a private or public facility. 

The banks that still offer rewards for MCC 8062 are American Express, Citibank, HSBC, Maybank and Standard Chartered. 

Therefore, the following miles and points cards can be considered:

The best earn rates are found on the UOB Reserve and Citi ULTIMA cards, but both of these require you to earn at least $500,000 a year to qualify!

A more realistic range is 1.1-1.4 mpd. This may not sound very exciting, but don’t forget you can use a large medical bill to take advantage of sign-up bonuses too. 

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For example, new Citi PremierMiles Card members who spend $9,000 in the first three months of approval can earn up to 45,000 miles, while new AMEX KrisFlyer Ascend members who spend $5,000 in the first three months will receive up to 21,000 miles plus a free stay at the Shangri-La Singapore. 

Assuming the medical facility accepts American Express cards, you could also use the AMEX True Cashback Card or UOB Absolute Cashback Card for 1.5 per cent and 1.7 per cent cashback respectively, with no minimum spend or caps.

Again, this isn’t a very high percentage, but it can add up on a large bill.

The GrabPay alternative

In the event that the medical facility doesn’t accept American Express cards, there’s still a handy workaround to earn cashback on your bill. 

You can use the AMEX True Cashback Card or UOB Absolute Cashback Card to top-up a GrabPay account, earning 1.5 per cent and 1.7 per cent cashback respectively in the process.

After this, it’s a simple matter of paying the bill with your GrabPay Mastercard. Do note that you will not earn GrabRewards points for transactions made at MCC 8062 (hospitals), and there’s an annual transaction cap of $30,000 on the GrabPay Mastercard.

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Conclusion

While it’s increasingly tricky to earn rewards for transactions at hospitals and polyclinics, the good news is that it’s not impossible.

If you have a choice of treatment facility, it makes sense to look up its MCC beforehand so you know which card can help you earn the highest rebate. And while you’re at it, check out some of the best insurance plans that will have you covered medically.

This article was first published in SingSaver.com.sg.