Most expensive purchases have a simple financing option. Do you want to buy a home? Get a mortgage. Do you want to go to college? Get a student loan. Do you want to buy a car? Sign a lease. Do you want to have cosmetic surgery? Well…
There isn’t a simple solution. Paying for your nip and tuck will get pricy. In fact, according to the American Society of Plastic Surgeons, Americans spent $10.7 billion for cosmetic procedures in 2010.
Most health insurance plans don’t cover cosmetic surgery (unless it is needed after an illness or accident, for example). So, where does that leave you? How can you finance your elective procedure without damaging your credit or draining your savings account? Here are five financing options.
1. Medical Credit Card
Many people have been turning to medical credit cards to pay for their procedures. These cards are popular because they typically offer 0% interest or have reasonable interest rates and payment plans. Medical credit card users appreciate that these cards can only be used to pay for medical issues. Therefore, individuals without much self-control don’t need to worry about overspending on unnecessary items with these cards.
We gave you the good news first; now for the bad news. If you miss a payment or don’t pay off the balance before the introductory offer expired, interest can be applied retroactively to the entire balance. And, the default APR can be as high as 30%.
Before using one of these cards, make sure you read the fine print. Also, only pay for one procedure at a time. For example, if you are getting a series of Botox injections, pay as you go. Don’t pay for all the procedures upfront.
2. Regular Credit Card
Using a credit card for a large purchase (and paying the bills on time) can help build or maintain your credit. However, these large purchases will tie up your credit line.
If you go this route, look for a new card that offers 0% interest as an introductory rate. Try to pay off the balance before the period expires. Also, don’t charge more than 30% of your available credit. Be very mindful of temptation. That new, shiny credit card might make you want to spend even more money on frivolous, unnecessary items you didn’t budget for. You’ll need a lot of self-control. Don’t add other purchases to the card until the initial balance is paid.
3. Bank Loan
A personal loan is another way to go. Some people prefer to go with a credit card since the interest rate of an unsecure loan is usually about the same. However, if you have never had a personal loan, you can enhance your credit rating by diversifying the type of loans you have.
In addition to boosting your credit rating, a personal loan also makes it impossible to add more to your debt. If you don’t have enough self-control, you could take your credit card to the mall and do a fair amount of damage. However, you can’t buy new shoes with your loan.
4. Doctor’s Payment Plan
Many doctors offer payment plans. Your doctor can probably offer you a flexible payment schedule that will work with your current budget.
The good news is you probably won’t have to pay interest. Plus, a missed payment won’t show up on your credit score. The bad new is you will probably have to pay the full amount before the surgery. And if you miss a few payments, it could affect your relationship with the doctor.
5. Cash Savings
In all honesty, this is probably the safest option. Granted, you’ll have to work hard to save money above and beyond your emergency stash. And, you won’t be able to receive instant gratification. But, you won’t have to borrow money from anyone, risk your credit score, or pay interest. Save a little money each month until you can pay your bill upfront.
No matter what type of cosmetic surgery you are interested in – hair transplants, breast augmentation, face lift – you can hopefully find a payment plan that will work with your budget and allow you to receive the appropriate procedure in a timely fashion. Be mindful of your credit – no elective procedure is worth the cost of a bad credit score.
About the Author: Guest author Mike Stromer works for a local hair restoration clinic. Over the years, he has dealt with all sorts of payment plans.