Credit Cards

The Lure, and Risk, of Medical Credit Cards

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Others question the process by which medical card companies sign up providers and patients. Usually, physicians must pay to enroll with a credit card company, just as retailers do. But in some cases, the companies reduce the fees they charge physicians when doctors successfully sign up new patients for cards.

“This kickback arrangement, plus CareCredit’s payment in full to providers within two days of the charge, creates an incentive for providers to push consumers to use CareCredit rather than other methods of payment,” according to the New York attorney general’s office. “In fact, providers pushed CareCredit over cash.”

CareCredit disputes this, saying there is no kickback to physicians in return for signing up new customers. The service creates efficiencies for doctors, CareCredit argues, but at a cost.

“(A)ll providers pay CareCredit a transaction fee to offer our services, as they do with any credit card,” White says. “It costs the provider more when the consumer chooses CareCredit among the several payment options they have, including cash, check or another credit card.”

Disclosures and protections

A number of people have complained that they were signed up for medical credit cards without their knowledge. A man in Monroe County, New York, was told he needed $5,600 worth of medical services. He went to a different physician without knowing the first doctor had signed him up for a CareCredit card and charged the full amount to his account. He didn’t pay, which made him delinquent and hurt his credit score, according to the attorney general’s office.

Two consumers in Minnesota accused medical card companies of signing them up without their knowledge, which led to a report by the state attorney general.

Finally there are concerns about how medical credit card companies handle cases in which the diagnosis or treatment changes along the way. Most charges on medical credit cards are made upfront, and are completed within a few business days, like most credit card transactions.

Sometimes the prognosis changes, and less work needs to be done. But patients who pay with credit cards already have had the transaction go through, leaving them little recourse to reduce the bill down to the amount they actually owe.

“We are concerned that some health care providers are aggressively marketing these high-interest credit cards to patients, without providing appropriate disclosures, protections, or refunds,” says Chuck Bell, programs director for Consumers Union.

And even when things work out as planned, consumer advocates wonder whether the very idea of charging medical expenses to a credit card makes sense. If bills are large enough, consumers will need to continue paying well after the zero-interest grace period ends. In the case of CareCredit, that means patients will be paying 27%, according to the card agreement.

“They’re not a great idea,” says Gerri Detweiler, a credit expert with  “If you can’t afford the medical care now, paying 26% or more for it is not really a solution.”

What else can you do? 

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