Should I use a credit card to pay for my surgery so I can t the rewards?
September 14, 2021 4:12 PM   Subscribe

I recently found out that I need to have a couple of surgeries over the next few months to the tune of about $8K altogether. Thankfully, I'm in a position where I could write a check to cover these surgeries. However, I'm considering getting a new credit card, putting the surgeries on the card, paying the card off in full when the bill comes, and collecting the rewards. Is there an obvious reason why I shouldn't do this? If I should do it, which card should I use?

Some details:

I am 100% confident that I will be able to pay off the surgeries in full.

Any new credit card I open would need to do better than 2% cash back on this surgery, as that's the reward I get with my current card.

If opening a new card, making a big purchase on it and then paying it off would be bad for my credit score over the next couple of months I don't want to do this because I'm probably going to try to buy a house early next year.

It wouldn't bother me to use this card only for these surgeries and then close it out.

I'm not familiar with the best cash back introductory deals for credit cards, so any information about that would be much appreciated.

Thanks!
posted by Chuck Barris to Work & Money (14 answers total) 3 users marked this as a favorite
 
What is your credit score now? If it's upper 700s do whatever, you will be eligible for the best interest rates and need to fall in low 700s to have it hit anything. Opening a new card drops your credit a couple points (I bought a house once and opened up 5 cards in the year prior). If you dont have much limit on your existing cards you'll have a higher limit and lower overall utilization so may even increase it

I put everything on cards-- I even bought a Prius with a card once. Go to town - just make sure your limit is high enough. Ask for more. Chase Sapphire is the gold standard for rewards.
posted by sandmanwv at 4:17 PM on September 14 [3 favorites]


Is there an additional fee or surcharge for paying these bills with a credit card? I’ve seen things like that before & that would make the cash back a washout.
posted by needs more cowbell at 4:18 PM on September 14 [15 favorites]


If opening a new card, making a big purchase on it and then paying it off would be bad for my credit score

A new card will cause a hard pull of your credit record (small ding to your score over the next 2 years) and lower your average age of credit (possibly a larger ding to your score if you have few long history lines of credit). Paying it off immediately will not affect your credit.

It wouldn't bother me to use this card only for these surgeries and then close it out.

This will negatively impact your credit score. It will simultaneously lower your average age of credit and put a closed account on your record, which credit agencies hate. This would be a bad idea. Get a new card if you must but hang onto it, put Netflix on it or something and set it to autopay if you don't want to use it in your regular pay rotation.

Your plan isn't bad in theory. I bought a whole car a few years ago on a credit card to get the cash back. It was great.
posted by phunniemee at 4:19 PM on September 14 [12 favorites]


I have an airline points card, because of COVID I've got points on it I'm not gonna use any time soon, and it costs me $100/year, and I can't close it 'cause the points are tied to it (made that mistake once before), and I'm itching to use those flights...

I doubt you're gonna do better than 2% cash back, especially since miles/points are invariably a hook to keep you paying for the card.

So, yeah, ask if they have a preference, and if they'll let you use the card, then go with it. Everything has a transaction cost, and it's likely that their processing fees with the card are similar to whatever costs they have dealing with checks or cash.
posted by straw at 4:36 PM on September 14 [1 favorite]


You should definitely do this as long as you know the MCC won't be considered cash like (I don't see any reason why it should for surgery).
posted by turkeyphant at 4:46 PM on September 14 [2 favorites]


And you have likely thought of this, but be sure your medical provider will take whichever card you’re looking at. My dentist won’t take amex, for example.
posted by mochapickle at 4:54 PM on September 14 [2 favorites]


I use my airline points card for everything including home improvements, but I pay off the balance every week. Works for me. Just flew out of state recently for free.
posted by Peach at 4:55 PM on September 14 [1 favorite]


It wouldn't bother me to use this card only for these surgeries and then close it out.

This will negatively impact your credit score. It will simultaneously lower your average age of credit and put a closed account on your record, which credit agencies hate.


This just isn't accurate. I open and close a few credit cards each year for the signup bonus. My credit score is north of 800. Average age of credit is a small percentage of your FICO score and accounts closed by the consumer don't ding you at all. From prior experience, I wouldn't expect the proposed plan to cause more than a 5-10 point dip in score, mostly from the hard pull.
posted by praemunire at 5:17 PM on September 14 [11 favorites]


I doubt you're gonna do better than 2% cash back, especially since miles/points are invariably a hook to keep you paying for the card.

Cash back ain't it. The signup bonus is. Find a card that offers you a few hundred in exchange for spending a few thousand over a few months (and that your surgeon accepts, of course) and lets you cash out at .01/point.
posted by praemunire at 5:19 PM on September 14 [8 favorites]


Talk to friends. Discover has a refer-A-Friend program. Chase offers me $225 for referring a friend who gets a card. There are surely much better offers.
posted by theora55 at 5:44 PM on September 14 [1 favorite]


praemunire and theora55 have it correct. Have a friend (or fellow mefite) refer you, and get the Chase Sapphire Preferred. Spend $4k, get 100k points, which are worth $1000 cashback, or $1250 if you use their travel portal.
posted by sacrifix at 6:35 PM on September 14 [12 favorites]


The answer depends on your current credit score.
Nerdwallet's current credit card roundup with sign-up bonuses/points/introductory deal info.
posted by Iris Gambol at 6:55 PM on September 14


I totally did this when my husband was undergoing major medical treatment (I would basically open a new card or two every time our deductible reset. I had an excellent credit score and I still do. I didn’t usually close the cards, though, I just asked to have them switched to non-annual-fee versions (card issuers call this a “product change”).

(And I’m happy to provide you with a referral code for a Chase Sapphire Preferred or an Amex Preferred Cash if you’re interested.)
posted by mskyle at 7:07 PM on September 14 [3 favorites]


I remember reading years ago about a fellow who charged a huge fee (like a million dollars) to Amex and redeemed his rewards - several free trips around the world. Amex reportedly challenged this, and lost. Of course they then changed the rules. Power to the people who manage to leverage their strategic spending. Good luck with your surgeries and enjoy your rewards!
posted by citygirl at 8:24 PM on September 14


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