Medical Credit Cards: Gutting Their Patients

In the cult musical Repo: The Genetic Opera, organ failure has become a worldwide epidemic and everyone has had at least one organ transplant. Medical procedures, however, do not come for free. Luckily, the 21st century health care provider Geneco offers convenient payment plans for the surgeries people need, and they push deals on elective plastic surgeries to achieve “genetic perfection.” Unfortunately, if a patient misses their payment, the repo man comes to take back their organs.

Repo men aren’t going to repossess our body parts if we miss paying our medical bills, but new medical credit cards are gutting consumers in a different way. Last Friday, the New York Times published an inside look at how health care providers are pressuring patients to sign up for high-interest medical credit cards and how some medical practitioners are signing up patients for these cards without their knowledge.

CareCredit is one of the big dogs in this new industry. Like the fictional Geneco, they focus their attention on people who are paying out of pocket for health care or are getting elective surgeries like Lasik, Botox, or weight-loss surgery. On CareCredit’s website, they advertise, “Feel your best, look your best,” and “Your beauty has value” as they helpfully provide the rates for liposuction and breast augmentations. What they don’t mention is that your beauty is valued at about 26.99% interest if you don’t pay your bill off in full in 6, 12, or 24 months and a penalty APR of 29.99%.

The thing with medical credit cards is that the people who initially apply for them are either not covered for dentistry work or hearing aids by insurance. Most of the people who are covered by insurance or can afford to just pay out of pocket are not going to apply for a medical credit card. Why should they? A medical credit card will hit them with unnecessary fees and interest on procedures that are either covered by insurance or procedures they can pay for outright. The people applying for medical credit cards are already struggling financially and think that this card will give them a means to afford the medical care they need. Additional pressure from medical practitioners makes the patient believe that a medical credit card is their best option without taking the time to read the fine print.

It is unfortunate that certain lenders are taking advantage of people at their most vulnerable times. Despite health care reform, there are still many Americans who do not have health insurance or have health insurance that does not cover everything they need. Unpaid health care bills can damage a patient’s credit score, and if they have a medical credit card, the high interest rates can send them into deeper debt.

The bottom line is that if you feel pressured to apply for a medical credit card, ask to see the fine print and bring it home. Take the time to read through all the details and fees, and make sure you understand exactly what you are signing up for.

To learn more about responsible credit card usage and money management, go to http://blog.mycreditspecialist.com/, and if you are unsure of your credit situation, sign up for a free credit evaluation at http://www.mycreditspecialist.com/.

Holiday Credit Card Use Takes a Hit

During the holidays, credit card companies offer all sorts of perks to get shoppers to sign up. American Express’ Daily Wish and Chase’s Ultimate Rewards are two popular programs that give away money, merchandise discounts, and gift cards to frequent card users. This year, however, fewer consumers are choosing to pick up a new card, and they will be more likely to use a debit card to buy their holiday gifts.

According to the Bedford Report, 43 percent of consumers will be shopping with their debit cards. Only 27.6 percent will be using credit cards, just slightly more than the 25.7 percent of consumers who will use good old-fashioned cash for their purchases. Furthermore, there was a 24 percent drop in open credit card accounts since 2008.

Why the change? Unemployment is still fairly high, so money is tighter for many families. Some people don’t trust themselves with a credit card. They might have trouble keeping track of how much they have spent, or they know that they don’t have strong self-control when it comes to holiday spending. Responsible consumers might prefer having a set amount of money on hand to pay or the threat of overdraft charges keeping them in check.

To read more about holiday spending, check out My Credit Specialist’s holiday shopping guide, coming soon on their blog at http://blog.mycreditspecialist.com, and if you are unsure about your credit score or credit history, sign up for a free credit evaluation at http://www.mycreditspecialist.com.