CareCredit Archives - FREE CONSULTATION

Medical Credit Cards Drive Patient Debt and Inflate Costs of Health Care, according to CFPB Report

Posted on June 26, 2023by Admin

The Biden administration has issued a word of caution to consumers about the growing concerns they have behind medical credit cards and other loans used to pay down medical bills. These concerns have been expressed in a new report published, which warns consumers that high interest rates on these cards can only increase the patient’s debt and eventually threaten their financial situation.

In the report, issued by the Consumer Financial Protection Bureau (CFPB), they reported that U.S. consumers paid $1 billion in deferred interest on medical credit cards and other types of medical financing between the years 2018 and 2020. The interest rates on these cards can be particularly high, which is why the CFPB found that medical credit card interest rates can inflate medical bills by approximately 25 percent (25%).

The Dangers of Medical Credit Cards

Posted on June 22, 2017by Admin

A medical credit card can help you cover an unexpected medical expense or procedure, but it is important to know the costs associated with these type cards. Offered at most doctors and veterinary offices nationwide, medical credit cards are designed to spread out the payments on medical-related bills you cannot afford to pay upfront.

Approval rates for these cards are high- you can even get approved right at the doctor’s office, according to CreditCards.com. These cards offer a type of financing called “deferred interest,” which sounds appealing in theory, but beware of the consequences. If the balance of the card is not paid in full by the end of the agreed-upon payment period, you are hit with all of the accrued interest at one time, which is typically a very high interest rate. For example, CareCredit’s APR is 26.99%, while the average credit card has an interest rate of around 16.5%.

Something else to remember: the promotional financing applies only to “healthcare-related” expenses, so if you use the card to buy groceries or fill up your gas tank, you will incur interest charges if you do not pay the bill in full during the billing cycle- even if it is within the promotional period.

One of the top medical credit card companies, CareCredit has come under fire when it comes to their lending and enrollment practices. CareCredit was forced to refund customers$34 million in 2013 by the Consumer Financial Protection Bureau for deceptive enrollment practices, because consumers thought they were signing up for interest free cards.

If you have medical debt, the best option is to work out a payment plan with the doctor’s office or hospital.

Click here to read more on this story.

Those who have experienced illness or injury and found themselves overwhelmed with medical debt should contact an experienced Miami bankruptcy attorney. In bankruptcy, medical bills are considered general unsecured debts just like credit cards. This means that medical bills do not receive priority treatment and can easily be discharged in bankruptcy. Bankruptcy laws were created to help people resolve overwhelming debt and gain a fresh financial start. Bankruptcy attorney Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.

Bankruptcy Law, Credit, Timothy Kingcade Posts

CareCredit Fined for Deceptive Marketing Practices

Posted on March 21, 2014by Admin

The popular medical credit card, CareCredit has been fined by regulators for its deceptive marketing practices. More than 100 professional groups, including the American Dental Association endorse the card. A regulatory filing done this week revealed the credit card company paid dozens of professional associations to convince their members to pitch the high-interest credit cards to their patients.

Protections in the U.S. Truth in Lending Act are designed to help consumers compare different financing options. CareCredit has been cited for faulty marketing practices by the New York Attorney General’s office and by the U.S. Consumer Financial Protection Bureau.

This is not the first time the company has come under scrutiny. Back in December of 2013, it was required to refund up to $34.1 million to consumers who were victims of deceptive credit card enrollment tactics at doctors’ and dentists’ offices around the country. Consumers signed up at the medical offices thinking the credit cards were interest free, but they were actually accruing interest of up to 26.99%, which kicked in if the balance was not paid at the end of the promotional period.

CareCredit had relationships with 107 professional associations and other groups as of December 31, 2013. Of these relationships, 63 were paid endorsements linked to member enrollment, according to the U.S. Securities and Exchange Commission.

Click here to read more on this story.

If you are in a financial crisis and are considering filing bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.

Bankruptcy Law, Credit, Timothy Kingcade Posts

$34 Million Settlement Received for Consumers Victimized by Medical Credit Cards

Posted on December 15, 2013by Admin

GE Capital has agreed to pay up to $34 million to resolve allegations that it misled consumers about the terms for credit cards offered by doctors to pay for medical procedures. This is the first settlement of its kind involving medical credit cards, which doctors and dentists offer to patients to finance expensive treatments, typically not covered by insurance. While these medical credit cards resemble other credit cards, there is a critical difference: they are marketed by caregivers to patients, often at vulnerable times, such as when those patients are in pain or when their providers have recommended care they cannot afford or insurance will not pay for.

The recent settlement comes as the Consumer Financial Protection Bureau is scrutinizing deferred interest financing plans, under which borrowers pay no interest for a set period of time, but are later hit with higher interest rates, oftentimes much higher than traditional credit cards. Credit card issuers have come under fire over disclosures for marketing medical credit cards, which often come with initial interest rates of 0% that later jump to double-digit rates if the amount owed is not paid off in full before the promotional period ends. Deferred interest cards, increasingly common in medical offices, are also offered widely by retailers with deferred financing terms for big purchases.

CareCredit, a division of GE Capital, is the largest issuer of medical credit cards with around four million cardholders and 175,000 participating medical offices. The CFPB said CareCredit placed borrowers in a financing plan without ensuring that the medical office staff selling the plan gave a thorough explanation as to the terms and conditions of these cards. The bureau said many consumers believed they were not being charged interest, when they were actually being levied nearly 27% interest after an initial interest-free period.

The settlement has resulted in GE Capital having to notify more than 1.2 million consumers that they can file a reimbursement claim for interest charges and fees. In addition, CareCredit must contact new consumers directly within 72 hours of taking out a credit card loan to explain the terms and conditions to them.

Click here to read more on the story.