Medical credit cards under investigation


Medical offices in some areas are becoming loan financing offices too. Image: Flickr/takomabibelot

In New York state, the attorney general has launched an investigation into medical credit cards. These high-rate credit cards are marketed to patients that need money now, often when they’re already in the doctor’s office. These cards, which offer an instant cash advance to pay off medical bills, are often marketed with allegedly deceptive practices.

How medical credit cards work

Medical credit cards are a product offered by a few financing companies. They are used to pay off medical bills, and they come with high interest rates. The medical provider is usually paid within a few days of the credit card charge and gets a rebate (aka extra money) based on how much is charged on the card.

The investigation into medical credit

For some patients, medical credit cards seem to be the easy answer. The New York Attorney General, though, is beginning an investigation into these cards because of alleged deceptive practices. Often patients are not informed of the high interest rates or payments on these cards. The Attorney General has stated that the investigation is into the deceptive marketing and kickbacks involved with these cards. By wearing the hat of both a finance adviser and a medical adviser, doctors may well be violating both their ethical and legal responsibilities.

The high cost of medical care

Though the new health care bill has several provisions that are intended to address the high cost of medical care, many changes have not yet taken effect. Health care debt is the leading cause of personal bankruptcy in the United States. These credit cards are marketed as no credit loans to help patients pay off their bills. In the end, though, they end up charging very high interest rates and fees that compound the problem. Until the high cost of medical care is addressed, paying for care will be a concern, with or without these medical credit cards.

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