While dental loans might seem like an obvious solution to any dental financing crisis, you may be wondering why you shouldn’t just use your credit card. After all, charging your dental expenses could be as simple as swiping your card at the dentist’s office on the way out. Why bother getting a dental loan when you can just use plastic then pay off your balance when you get time?
The truth is, there are advantages to using both dental loans or credit cards to cover expensive dental care. The best option won’t be the same for everyone since it depends on a wide range of factors.
Dental loan advantages
One easy way to tell if a dental loan is a better deal is if the interest rate is lower. If the interest rate on your credit card is higher than what you would pay on a dental loan, then skip credit cards all together, he says. To find out whether you can get a lower interest rate on a personal loan, you can apply for a free quote online and compare the rates you qualify for to the APR offered on your credit card. At LendingTree, for example, we have a online form you can use to potentially compare offers from several lenders at once.
In addition to interest rates, many consumers prefer the fixed monthly payments of personal loans versus the unpredictable payments of credit cards. Not only may your credit card’s interest rate be variable, but your balance and monthly payments can surge if you continue using your credit card for purchases.
Credit card advantages
According to Brian Hanks, a financial adviser for dentists and the author of “How to Buy a Dental Practice”, a credit card can be a good option when the procedure is an absolute emergency and you don’t have time to apply for a dental loan ahead of time.
In addition, credit cards can be a good option if you score a special financing deal, like a card with a 0% intro APR. “If you know you can pay 0% on a credit card balance for a period of time, and you know you’ll be able to pay for your dental procedure, go ahead and put it on the card,” said Hanks.
Last but not least, it can make sense to use a credit card if you have the cash to pay your entire bill but want to use credit to earn rewards. By putting your dental expenses on a cash-back credit card and paying your bill off right away, you could earn an average of 1-2% cash back on your total bill, which could add up quickly if you’re spending a lot.