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Medical Credit Cards - A Bad Idea Gets Worse

A new kind of credit card is making its debut and at an unlikely place; your medical provider's office. They are called medical credit cards and are offered through the offices of doctors, dentists, and other niche medical providers.  The idea is that if a patient is short on cash, the provider can arrange for financing through a third party. This way the provider is paid, the patient receives the treatment they need, and payments can be made over time.  

It all sounds good, right?  Many of these medical finance programs also offer a zero percent interest for a short promotional period.  The bad news: After the end of the promotional period, interest rates of nearly 30% kick in. The rates are not just against the current balance owed, but in many cases are applied retroactively to the original starting balance (similar to 'buy now pay later' offers through national retailers).   In addition to exorbitant interest rates, consumers can be hit with outrageous late fees and other penalties if they do not pay the bill on time.


State Regulators Scrutinize Medical Credit Cards

State regulators have begun to focus on medical credit cards and are concerned that patients may be extremely vulnerable, and not in a good position to make financial decisions while undergoing a medical treatment.  Additionally, anecdotal evidence has begun to mount that many individuals are not aware that they are signing up for a medical credit card, simply believing that they are getting approval for installment payments to their doctor or dentist directly.

The New York State Attorney General's Office has reportedly received hundreds of complaints from patients that believed they were duped by a medical credit card arrangement.  While we don't have any hard figures, it is believed that more than 10 million medical credit cards are being actively used in the United States today.

My Advice 

From my reading on this topic, it appears that the most frequent use of these cards is at dental offices.  In my own family, we have found dentists very hard to work with when it comes to billing practices, disclosure, etc...  Even though my wife has a dental insurance plan (through her employer),  she usually ends up in a nasty confrontation when it comes to our final bill.  It has gotten so bad that our current routine is to require the front office staff to provide us a written bill in advance of receiving services.  In fact, we have seriously discussed dropping the dental insurance altogether. We have found that the dentist is getting very little reimbursement from the insurance, and as a result has to come up with 'creative' service charges to make any money.  


I don't want to give a bad rap to all dentists, but many of my friends share with me similar frustrations. Dentists are in the unenviable position of not receiving much in third party reimbursements from insurance companies, and as a result seem to be inclined to padding their bills with questionable add-ons. I can share with you countless stories of family members going in for a 'free annual cleaning' only to be presented with a bill for $200 or more.  In one case, without asking, I was handed me a small dixie cup and told to swish the liquid around in my mouth and spit it out into the sink.  Little did I know that I had just received a $39 fluoride treatment.  No, they did not ask and they did not tell me the cost in advance.  I was also told four years ago by a local dentist that I had several so called 'pre cavities.'  I have not had a cavity since I was 10 years old.  I opted not to pay several hundred dollars for 'pre cavity' treatment.  Four years later, I still don't have cavity one.  Yes, we have changed dentists about a dozen times over the years.

When Short On Cash - Comparison Shop

Of course, I have always recommended doing price comparisons with all medical services and I have written prior articles on this.   Here is an interesting article on how to use the Internet to shop out dental services.   Especially when it comes to dental, you really should take the time to comparison shop. If you are on a tight budget, be honest and let them know. Many times you can opt for a less expensive procedure or a temporary fix that can be dealt with on a permanent basis down the road.  Some dentists will work with patients on a payment plan within their office with no interest charges.  In this economy, it never hurts to ask about such arrangements.

Articles To Read -

Is Your Dentist Ripping You Off?

Is Tooth Cleaning A Scam?

Dentist Ripoffs Revealed

Its Not Just Dentists

Any medical service provider that does not receive much in the way of insurance reimbursements is likely to offer these kinds of high interest finance plans.  This includes chiropractors, plastic surgeons, and medical device providers (e.g. hearing aids). 

If you have your own story (good or bad) about payment plan arrangements with your medical provider, please use the comments section below and we can start a conversation.

Helping you make the most of God's money!

James L. Paris 
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