Healthcare costs within the United States can seem daunting when you are faced with a high medical expense on the horizon, but combining sign up bonuses and rewards programs from credit cards with a Health Savings Account (HSA) can drastically reduce the financial impact of medical expenses. Contributions to an HSA can save you from paying federal, state and payroll taxes. On top of that, HSA funds can be withdrawn tax-free for qualified medical expenses. These tax savings properties of HSAs can save you a substantial amount of money when it comes to paying for medical expenses.

One way to further increase your medical expense savings is to pay for your medical expenses with a credit card. Many credit cards offer generous sign up bonuses and generous rewards if certain spend requirements are met. When properly utilized, this strategy can boost the amount of money you are saving simply by taking advantage of sign up bonuses and rewards offered by many credit card companies, which often come in the form of cashback, travel miles or gift cards. When utilizing an HSA with a credit card you are able to take advantage of a sign up bonus, tax benefits, and cashback rewards. Below we outline the steps to successfully employ this strategy.

To expand on the example earlier, if you paid for $4,000 worth of qualified medical expenses directly with the Chase Sapphire Preferred Card, and then paid the balance in full with reimbursed HSA funds, you would be looking at some significant savings. Let’s look at the numbers.

$2,091 is a lot to save against $4,000 worth of expenses. In fact, that is 52% savings on the original $4,000 medical expenses. No matter which way you slice it, it is rare to find over 50% savings in anything, especially when it comes to medical expenses.