Tag: medical credit cards

Medical Debt

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

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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%).

Credit Card Debt, Medical Debt

How to Keep Medical Debt Off Your Credit Cards

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With the cost of medical care increasing every year, many Americans are struggling to pay their medical bills. According to a recent study from NerdWallet, medical costs have increased 33 percent since 2009, while the national median household income has only increased 30 percent. To keep up with these costs, many consumers are forced to pay for their medical bills with credit cards. The problem is credit card interest rates can range anywhere from 10%-30% and come with additional fees and costs if timely payment is not made. Medical bills are expensive and paying them with your credit card will only add unnecessary interest fees to your bills.

Here are some tips that can help you avoid having to put medical bills on a credit card.

Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

5 Alternatives to Charging Your Medical Bills

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If you are like many individuals today facing serious medical bills, it is important to know that you have options.  The rising cost of healthcare, combined with the growing number of Americans without adequate health insurance has led many people to file for Chapter 7 bankruptcy. In fact, medical debt is the No. 1 reason people file for bankruptcy in the U.S.  In 2014 alone, an estimated 40% of Americans accumulated medical debt resulting from a health issue.  Instead of putting medical expenses on your credit cards or worse signing up for a medical credit card, here are some alternatives that can help you stay out of medical debt.

  • Enroll in a payment plan. Certain hospitals and doctor’s offices offer payment plans for low-income patients. This will allow you to work out a payment plan directly with the healthcare provider, pay your bill overtime and avoid interest charges.
  • Ask about charitable funds. If your household income is low enough, you may qualify to have your medical bill completely dismissed.  Some hospitals have money set aside to pay for treatment of patients who cannot afford to pay their bill.  This is especially common in emergency health situations.  However, be warned the paperwork and forms involved is extensive but is worth it in the end.
  • Negotiate a lower amount. Depending on the circumstances, you may be able to negotiate a lower bill.  It never hurts to ask.  In some cases, hospitals may agree to settle the debt for less than you owe.
  • Consider taking out a personal loan. If you have exhausted your other options and still need help paying your bill, consider taking out a personal loan rather than using credit cards. If you have good credit and a stable income, you could qualify for a loan with an interest rate as low as 5 percent.

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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 McMaken, 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 McMaken website at www.miamibankruptcy.com.

 

Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

Medical Credit Cards Leaving Patients with Aches and Pains

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Long after the procedure is over, patients are still suffering with pain.  Not from the operation, but from the card they used to pay for the operation.  Medical credit cards are offered at the doctor’s office to pay for procedures, patients otherwise cannot afford at the time.  This type of credit seems like a quick fix for pricey procedures not covered by insurance.

However, according to a recent survey by the Kaiser Family Foundation, nearly a third of Americans report trouble paying their medical bills and many have taken on credit card debt to pay the expenses.  Medical debt is the No. 1 reason Americans file for bankruptcy.

One of the biggest dangers of medical credit cards are the misconceptions associated with them.  A number of patients think they are setting up an installment plan with the doctor’s office.  Many do not understand they have opened up a new line of credit with sky-high interest rates and strict penalties for even a single missed payment.

Most of these cards feature a “zero interest” promotional period for up to 18 months. But then the interest rate can jump to 25 percent or higher.  Some consumers never received a copy of the credit card terms and had to rely on explanations from medical staffers who had little training on the card details, in cases cited by U.S. authorities.

Another potential drawback is something called deferred interest. That means if a patient does not pay off the entire balance during the “interest-free” period, they can be retroactively charged for interest dating back to when they first signed up.

Before you sign up for a medical credit card, we advise that you research other options, first.  Medically necessary procedures may be available at a discounted rate or even for free at certain hospitals that provide some level of charitable care.  If it is not medically necessary, consider waiting until you can afford the procedure.   If you must use a credit card to pay for a procedure, use one that has terms and conditions you understand.

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Those who have experienced illness or injury and found themselves overwhelmed with medical debt should contact an experienced Miami bankruptcy attorney who can advise you of all of your options. 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 McMaken 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 McMaken website at www.miamibankruptcy.com.

Debt Relief, Timothy Kingcade Posts

The Dangers of Medical Credit Cards

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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.

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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

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

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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.

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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

The Dangers of Medical Credit Cards

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We all know that medical bills can be costly, especially when insurance only covers a small portion of the procedure. But recently, some doctors have been offering a solution to this problem- a special line of credit to help cover your bill. What seems like a perfect solution is becoming a credit nightmare for many. This “buy now pay later” option comes at a cost- high interest rates and severe penalties if payments are late or missed.

A growing number of health care professionals are urging patients to pay for treatment not covered by their insurance plans with credit cards and lines of credit that can be arranged quickly in the provider’s office. The cards and loans, which were first marketed about a decade ago for cosmetic surgery and other elective procedures, not typically covered by insurance, are now victimizing older Americans.

Patrcia Gannon, 78, learned the hard way when she signed up for Dr. Knelinnger’s medical credit card to cover her partial denture. The cost for the procedure was more than $5,700. She pays roughly $214 a month, which eats up about a third of her Social Security check. If she is late, she faces a penalty of $50. The interest rate for the card is 23 percent and she receives a 33 percent penalty rate if a payment is missed or late.

Doctors, dentists and other medical professionals have a financial incentive to recommend the financing because it encourages patients to opt for procedures and products that they might otherwise forgo because they are not covered by insurance. It also ensures that providers are paid upfront — a fact that financial services companies promote in marketing material to providers.

While 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 problem has become so severe that attorneys in several states have filed lawsuits claiming that certain dental practices and other medical professionals have misled patients about the financial terms of the cards, employed high-pressure sales tactics and overcharged for treatments and billed unauthorized work.

The New York attorney general’s office found that health care providers had pressured patients into getting credit cards from one company, CareCredit, a unit of General Electric, which gave some providers discounts based on the volume of transactions. The investigation found that patients were misled about the terms of the credit cards, and in some instances, tricked into believing that they were agreeing to a payment plan with the medical provider when, in fact, they were being pushed into high-cost credit.

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