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Dangers of medical credit cards enough to make you sick

by Peter Andrew

New York attorney general Eric T. Schneiderman issued a consumer alert on Nov. 14, warning of the potential dangers of medical credit cards. These first came into existence in the early 2000s, when they were most commonly used for cosmetic and other elective procedures, but have more recently become mainstream.

Sick credit cards

According to Schneiderman, many doctors and dentists are today pressuring patients to use them to fund basic care procedures that are not covered by private insurance or Medicare. This, he contends, may be putting many -- and especially many elderly -- Americans at risk of unmanageable credit card debt.

The consumer alert alleges that both doctors and dentists may be financially incentivized to press patients to apply for these credit cards. Not only does this plastic allow practitioners to upsell premium procedures and products that would normally be unaffordable (and sometimes medically unnecessary), but they also allow offices to receive the full cost of ongoing treatments upfront.

"The explosion of medical credit card debt is a major concern for many Americans, particularly vulnerable seniors and low-to middle-income households. For patients, the financial consequences can be dire," Schneiderman said in a written statement. "The problem is made even worse by companies that encourage high-pressure sales tactics in our health care settings and companies that charge outlandishly high interest rates."

Sensible advice

The consumer alert contains helpful advice, including:

  1. Don't ever apply for a medical credit card in a healthcare provider's office. Take home and read fully the application and its terms and conditions. If in doubt, ask for advice from family, friends or professionals.
  2. Don't agree to pay for a course of treatment upfront. Instead, ask to pay on each visit. If your doctor or dentist resists, shop around for a better one.
  3. Beware of so-called "no-interest" offers, which are often actually "deferred interest" offers. Make sure you understand fully what may ultimately be payable before you sign anything.
  4. Ask your practitioner about alternative (maybe in-house) financing options, and compare all your alternatives.
  5. Check you're not paying for anything that's already covered by your insurance.

You wouldn't take your financial adviser's medical advice on trust. Vice versa is no better.

Published 11/27/13


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