HEALTH-CARE CREDIT CARDS-USE WITH CAUTION
Help! My dentist says I need thousands of dollars’ worth of dental work and it’s not covered by my insurance!
When unexpected expenses come up and a patient just doesn’t have the money to pay for it, a healthcare provider may suggest a special credit card for these expenses. A distressed consumer may turn to this type of credit option, which is offered to a patient at the provider’s office. These health-care credit cards will cover part or all of the expense, but they are not without risk.
These cards can offer “no interest” for the initial term. At the end of the initial term, the card user must have paid the balance off in full. If the borrower has not paid the entire balance off in full by the end of that initial term, all of the interest along with the unpaid balance becomes due and these special cards can have a very high interest rate-a rate of 26.99% has been reported by the Consumer Financial Protection Bureau.
In December 2013, the Consumer Financial Protection Bureau ordered GE Capital Retail Bank and its subsidiary, CareCredit, to refund millions to consumers who were victims of deceptive credit card enrollment tactics. At doctor’s and dentist’s offices around the country, patients were signed up for CareCredit cards they thought were interest free , but were actually accruing interest that “kicked in” if the balance was not paid at the end of the promotional period. The interest is calculated all the way back to the date the borrower signed up for the credit.
So what is a consumer who is facing this type of expense to do?
- If your medical provider suggests using a special health-care credit card as an option for payment, don’t rely on their explanation of the terms of the credit.
- Ask for a printed copy of the application and read it carefully.
- Be sure you understand the terms and the interest rate after the promotional period.
- If you decide to apply, make sure to divide up and make your payments evenly to ensure that you have no balance by the end of the initial term.
- Consider whether you have other options such as an existing credit account with a lower interest rate.
If you have questions about this or other legal matters, call ELDER LAW & ADVOCACY at (858) 565-1392. Most seniors and their caregivers are eligible for free legal advice.