US Markets
Home›US Markets›Equities›Medical debt puts millions at risk as credit cards bec…
Medical debt puts millions at risk as credit cards become a stopgap
A household carrying a $50,000 medical bill on credit cards faces a $2,000 monthly minimum payment, which would take more than 20 years to pay off and add nearly $40,000 in interest.
Yahoo Finance reports that about half of Americans hold onto medical debt, and many say they struggle to keep up, including letting bills become past due or moving into collections. The story also notes that even with insurance, out-of-pocket costs such as premiums, deductibles, co-pays, and uncovered expenses can leave patients owing substantial balances.
The article describes an example of a family that incurred $50,000 in medical bills and charged them to credit cards. Five years later, the household says it has barely reduced the debt, and the scenario assumes that keeping up with $2,000 monthly minimum payments would take more than 20 years to pay down the balance, with nearly $40,000 in additional interest.
Yahoo Finance also says the outlook can be complicated by insurance gaps and prolonged cash flow strain, particularly when only one person in the household is able to work. At that point, the piece outlines options people consider, including debt management plans, debt settlement, or bankruptcy.
On debt settlement, the article cites an FTC warning about risk from for-profit programs that negotiate on a debtor’s behalf, including the requirement to set aside a specific monthly amount until funds are available for a lump-sum settlement. It adds that if payments stop and the settlement company fails to reach an agreement, the debtor could face a worse outcome through additional late fees and interest, and that the programs typically require on-time monthly payments to succeed.