A financial guide to cosmetic plastic surgery

Whether it’s because of or despite the pandemic, plastic surgery is going strong. For many, recovery at home or behind a mask makes the procedure a little easier to fit into their lifestyles, but the cost might still not fit so easily into the budget.

According to the American Society for Aesthetic Plastic Surgeons, Americans spent an incredible $9.3 billion on all aesthetic procedures in 2020. The numbers sort out to almost $6.2 billion for surgical procedures and a little over $3.1 billion for non-surgical procedures.

Break it down to the average cost per procedure, and the figures are still steep. For example, the society reports an average of nearly $5,000 for a procedure such as a breast augmentation or rhinoplasty (nose job).

And insurance doesn’t typically cover these expenses. “Consumers should be aware that cosmetic surgery is not covered under insurance, so all of the expenses must be paid out of pocket,” says Kevin Kautzmann, a New York City certified financial planner.

While the term “plastic surgery” is often used broadly, the American Society of Plastic Surgeons points out that there are actually two main sub-categories of plastic surgery: reconstructive procedures and cosmetic procedures. Reconstructive surgery focuses on restoring function and normal appearance or correcting deformities; these types of surgeries might be covered by medical insurance.

On the other hand, cosmetic procedures focus on “reshaping and adjusting normal anatomy” and are not considered medically necessary; these procedures are in all likelihood not covered by your health insurance. If you’re unsure how your procedure might be classified, talk to your healthcare provider and insurance representative to avoid any expensive surprises.

Paying for cosmetic procedures

So if you’re pursuing a cosmetic procedure and insurance doesn’t cover it, what are your payment options?

Consider Kathy Riffey, a former Baltimore medical insurance analyst who lost 40 pounds. The resulting saggy skin caused her to seek a breast lift and implants, and she didn’t have $8,000 saved to pay for the surgical procedures.

With the aid of her plastic surgeon’s finance office, she chose one of the medical credit cards on the market. With an introductory 0% interest rate for six months, followed by a moderate rate hike, Riffey opted for a 24-month repayment plan. The bill came to $167 per month.

“It was a lower interest rate than a credit card with better payment plan options,” she says.

If you consider cosmetic surgery that your health insurance won’t cover, you can explore various payment options.

1. Health care or medical credit cards

Medical credit cards are health care financing in the form of a credit card. Patients can use medical credit cards to pay for deductibles and other out-of-pocket costs, as well as for treatments and procedures not covered by insurance. These cards are limited to covering only medical expenses and are often offered as a financing option to cosmetic surgery patients.

Pros: Medical care credit cards, such as CareCredit, often come with attractive 0% promotions, and some can have reasonable interest rates and payment plans. Since they are limited to medical expenses, they can lend “a sense of control if you tend to overspend” on regular credit cards, says Billy DeFrance, an El Paso, Texas, financial planner.

Cons: There have been predatory lending allegations against health care card lenders, as well as lawsuits against medical providers who signed unknowing patients up for the cards. Deceptive marketing practices have included claiming the cards had no interest, but then applying accrued interest if the balance had not been paid off by the end of a promotional period. The Consumer Financial Protection Bureau explains the restitution and safeguards that have been implemented, including enhanced disclosures to make sure someone taking out a medical credit card understands exactly how potential interest will accrue.

Advice: Research the card and read the fine print. Do not pay for multiple procedures upfront – such as a series of Botox injections – but insist on paying as you go. “A surgeon’s job is not to determine whether a patient can afford the procedures, but rather to communicate whether the procedures can achieve the patient’s goals,” said Dr. Ariel Rad, former director of aesthetic plastic surgery at Johns Hopkins School of Medicine in Baltimore. “Patients should take a step back after the consultation and ask: ‘What procedures do I really want or need?’ and ‘What amount can I really afford?'”

2. Regular credit cards

You can use a low-interest credit card you already have or apply for a new card with a 0% introductory period to pay for your procedure. Alternatively, if you’ve already paid for a procedure and are looking to pay less interest as you tackle the balance, you can consider a balance transfer card. These credit cards typically offer a 0% introductory APR for somewhere between 12 and 18 months for a balance you transfer from another credit card. This allows you to pay down your credit card debt without fighting an uphill battle against accruing interest.

Pros: Assuming the card has a reasonable interest rate, this can be an affordable way to pay for the surgery while you maintain or even build your credit. Either choose a card with a good intro interest rate or transfer your balance to a card with a good balance transfer offer if you’re carrying a balance from a previous procedure.

Cons: A large purchase such as cosmetic surgery can tie up your credit line and reduce your credit utilization ratio (which in turn may lower your credit score) initially.

Advice: Don’t pay more than 10% interest, Kautzmann says. Don’t add other purchases to the balance, and do your best to pay off the balance before any introductory rate expires.

3. Bank loan

Another option: A personal loan from your local bank or credit union.

Pros: While the interest rates on an unsecured loan from a financial institution run close to or more than those on credit cards (depending on your creditworthiness and ability to qualify, of course), bank loans have fixed interest rates and a fixed amount of time in which to repay. Plus, if you’ve never taken out a personal loan before, it can boost your credit rating by adding to your credit mix. Of course, you still need to make on-time payments until the repayment term is complete. And, unlike a credit card, you won’t be allowed to add more to the balance and dig yourself deeper into debt.

Cons: Unsecured loan interest rates can add quite a bit to the final cost (in interest charges) of your elective procedure. The rates are usually similar to credit card rates and will vary with the borrower’s creditworthiness.

Advice: For a lower interest rate, you may want to ask about a secured loan (where you offer up collateral against the loan, such as a car or house), although if you end up being unable to make the payments, you risk losing that property.

4. Home equity loans and lines of credit

You can also consider loans against the equity of your house, with interest based on current mortgage rates.

Pros: This option can be easily accessible for homeowners and affordable depending on your mortgage rate. Plus, interest is tax-deductible for most people.

Cons: An uncertain housing and job market mean that you could be left holding your hat should you be forced to sell your home – or if interest rates take an unexpected jump. In a post-pandemic world still struggling with the coronavirus, think carefully before choosing this route.

Advice: “Using a home equity loan can get people into financial trouble,” says New Jersey certified financial planner John M. Egan. “However, some of our clients have used a home equity loan for plastic surgery [when] the interest rates are very low – but as a last resort.”

5. Cash savings

Consider using money in the bank that isn’t earmarked for emergencies.

Pros: You don’t have to borrow or pay interest. This is simple, and you can enjoy the results of your cosmetic surgery without the financial ramifications hanging over you.

Cons: Your savings decrease.

Advice: “It may not be sexy, but the best answer for most people is to save each month until you have the bill covered, then get the procedure done,” says Rochester, New York, financial adviser Michael Masiello. “We as a society, at every level, have to get off the merry-go-round of immediate gratification spending because we want it, regardless of whether we can afford it.”

6. Unsecured medical loans

Unsecured medical loans can come in the form of personal loans or credit cards and are often brokered through third parties, such as doctors or brokers.

Pros: If you have a low credit score and have trouble finding other sources of financing, this can be an option.

Cons: Interest rates tend to be high or can balloon after an attractive introductory offer. If you have a co-signer and you default on the loan, it will damage that person’s credit and the co-signer will be on the hook for repayment – not to mention the hit your relationship may suffer.

Advice: Shop around for the best deal. As always, read the fine print and consider whether financing cosmetic surgery at a high interest rate is truly within your financial goals.

7. Doctor payment plans

Some doctors will work with patients to create a payment plan that works with their budgets, although most require payment in full before the surgery.

Pros: These plans usually don’t include interest. Physician offices that offer financing typically have the flexibility to create a plan that works for each patient. Missed or late payments probably won’t show up on your credit score.

Cons: Unpaid loans can still go to a collection agency. Failure to pay could affect your relationship with the doctor if you need or want future procedures.

Advice: Make sure you’re clear on the terms of the payment agreement and know that failing to pay could have negative consequences for both your relationship with your doctor and your credit score.

8. 401(k) loans

Most 401(k) retirement savings accounts allow participants to borrow up to 50% of the vested balance up to a maximum of $50,000 in a 12-month period. Repayments are automatically deducted from your paycheck over a period of up to five years.

Pros: It’s easy, quick, and has no impact on your credit rating. The interest rates are low, and there’s a modest origination fee. You pay yourself the interest – not a credit card or bank.

Cons: You repay the loan with taxed money, creating a situation where you pay double taxes since you will pay taxes when you eventually withdraw the money in retirement. If your plan doesn’t allow you to make contributions while you’re paying off the loan, you lose out on tax benefits and asset growth during the repayment period. If you leave your job for any reason before the loan has been repaid, you may have to repay the 401(k) loan right away, or else it is reported as taxable income. Plus, if you are younger than 59 and a half years old and leave your job, you suffer an additional 10% penalty. “Depending on your tax bracket, you could stand to lose up to 45% of the loan balance to federal income tax or more if there is state income tax,” says New York City financial planner Jeffrey Woolf.

Advice: If you have a financial or tax advisor, check with your professional to see how this will affect your personal situation. Regardless, think carefully before taking this option and make sure you have a plan to repay the money, or you might regret this choice in your retirement years.

9. Loans from family and friends

Got a relative with plenty of dough? What about a friend who just came into some money? Borrowing from friends and family can be tempting.

Pros: If you can’t get credit elsewhere, it might be your only option. Terms can be excellent. Your loved one may be flexible should you make a late payment.

Cons: You could permanently damage a family relationship or friendship if you default on the agreement. If you don’t pay interest, the lender doesn’t stand to benefit financially. It jeopardizes the relationship. Thanksgiving dinner could get awkward.

Advice: If you have someone willing to lend you money, make sure you put everything in writing regarding the amount borrowed and how and when you’ll repay the loan.

10. Gifts

Dr. Michelle Copeland, a New York City plastic surgeon, has seen patients receive gift certificates for procedures or set up funds through which loved ones can contribute money toward a surgery.

Pros: You get the gift you want (instead of that tacky holiday sweater). You don’t have to come up with the money yourself. It doesn’t affect your credit. Your request could rally emotional and social support for your pending surgery.

Cons: You might be too embarrassed to ask. You might not get enough money. Your grandma could be horrified.

Advice: If you feel comfortable making this request, consider a reputable site, such as DepositAGift.com, MyRegistry.com or Gofundme.com, where friends and family are more likely to feel secure depositing cash gifts electronically.

Bottom line

No matter how you choose to finance your cosmetic plastic surgery, make sure you research the financing fine print and your surgeon – and think hard about whether lifting, tucking, trimming and snipping are really worth the drag on your bottom line. If it is, make a plan that fits your budget so you can enjoy the results of your procedure without financial regret.

See related: Paying medical bills: Things to know