Proliferation of “medical credit cards” could set up patients for even more medical debt

The Consumer Financial Protection Bureau (CFPB) is the agency tasked with protecting people from unfair and deceptive banking and credit practices.  The agency recently asked for public input on the latest happenings in the consumer credit card market. 

U.S. PIRG was quick to raise the alarm on the proliferation of “medical credit cards.” These relatively new financial products are offered in health care provider medical offices by front office staff. Patients worried about how they’ll pay for a procedure are offered an application for a “medical credit card.” Our comments to the federal agency pointed out that these so-called credit cards may offer no-interest for several months, but they are really not the deal they appear to be.

“What most patients don’t realize is that the first time you miss a payment, that high interest rate kicks in and it applies retroactively – from the day you put the charge on the card,” said Patricia Kelmar, PIRG’s senior health care director. “Those high rates, coupled with expensive late fees, can really add up – in addition to what you already owe for the medical care.”

In its comments, U.S. PIRG asked the CFPB to consider several concerns: 

• Is there an implied “trust” when a health care provider is marketing/offering the credit card in their offices at point of sale, and how might that affect a patient’s decision to sign up for medical credit cards?
• What kind of medical ethics come into play when health care providers start marketing/offering financial services and can use “free credit” to upsell patients on procedures not covered by insurance?
• What impact will the prevalence of these cards have on the future availability of low or no-interest payment plans that are currently offered by providers?

U.S. PIRG’s comments ended by stating, “Patients should be focused on making health care decisions in their physician offices, and wait to make financial decisions after they have time to read the fine print and understand their potential liability for these medical credit cards.”