HealthWatch: Medical Credit Cards Can Cause Financial Headaches

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Credit cards. (DAMIEN MEYER/AFP/Getty Images)

Credit cards. (DAMIEN MEYER/AFP/Getty Images)

SAN LEANDRO (KPIX 5) – Can’t pay your vet, dentist or doctor bill? More and more health care providers are now offering patients third-party financing in the form of a medical credit card. But consumer advocates warn the cards can have painful consequences.

Just ask Billie Cortez of San Leandro. Back in April, while suffering a toothache, the retiree visited a nearby dentist for treatment. She said the dentist recommended a fix that would cost about $2,500.

“They wanted the money up-front,” Cortez told ConsumerWatch.

And Cortez said the dentist then presented her with an application for a Genesis dental credit card. “I was in the chair, with pain medication, and I was laying back and the dentist brought in the paperwork,” Cortez explained.

The card would allow Cortez to pay off her procedure in monthly installments, with no interest for one year.

So, she signed up. And that toothache turned into a financial headache. Cortez said before she even went back to the dentist’s to get the work done, she got a statement for $2,506, along with a notice that her monthly payment would be $150. Way more than Cortez expected, or could afford.

“I never could have done it,” she said. And she said the bills kept coming, even after she cancelled the treatment.

Jose Quinonez, executive director of the non-profit Mission Asset Fund, an organization that offers financial guidance to low-income individuals, is concerned patients may feel pressured to sign the credit agreements.

“That person is under duress and maybe more than likely is not making the best financial decision,” Quinonez told ConsumerWatch.

He also says money charged on a medical credit card goes immediately to the health care provider, while the credit card company handles billing the consumer.

But he warned the cards can backfire on consumers who can’t keep up with the payments and the high interest rates that kick in after the interest-free promotion period ends.

“It can actually harm them financially rather than help them,” Quinonez said.

California’s Business and Professions code imposes some regulations on dentists who offer third-party credit cards. Dentists are required to give clients a written explanation of how the financing works, before arranging or establishing the account. Dentists are also required to refund customer’s payments within 15 days, if work is paid for, but not actually performed.

(Copyright 2013 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

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