“Medical credit cards prey on sick people facing huge bills for services that are already more costly than they need to be.”
—Emily Stewart 

See Community Catalyst’s petition on medical credit cards here


May 4, 2023  

Contact: Jack Cardinal, (781) 960-5208, jcardinal@communitycatalyst.org   

BOSTON, MA — This morning, the Consumer Financial Protection Bureau (CFPB) released a report warning about the dangers of medical credit cards and high-interest loans, which are often promoted in doctor and dental offices, as well as hospitals and emergency rooms, to people that might otherwise be eligible for financial assistance or charity care. Medical debt is the most common type of consumer debt in collection – accounting for more than $88 billion. Spurred by an influx of profit driven fintech and financial institutions, these predatory medical credit cards trap sick people in a cycle of debt, with people paying approximately $1 billion in deferred interest on health care charges from 2018-2020, according to the report.   

Statement from Emily Stewart, executive director of Community Catalyst:   

“Financial incentives and greed are driving millions of sick people into medical debt with predatory deferred interest credit cards and installment loans. Medical debt is a uniquely American problem and the Biden-Harris administration must act now to put additional protections into place.  

“Due to predatory practices by credit card companies, people are being pushed into debt for trying to get essential health care. Medical credit cards prey on sick people facing huge bills for services that are already more costly than they need to be. They are often offered right in doctor and dentist offices, as well as hospital and emergency rooms, with little to no patient education. Making matters worse, these patients are often eligible for financial aid or charity care, which would limit their financial responsibility in the first place.   

“Sadly, the predatory nature of these credit cards is not news to those of us who are working to address the medical debt crisis that impacts 41 percent of adults in the U.S. We are grateful for the CFPB’s attention to the issue and hope that they, and other federal agencies, take immediate action.” 

Backed by a coalition of more than 60 organizations – representing civil and human rights, economic fairness and health justice – Community Catalyst is petitioning the Biden-Harris administration, and CFPB specifically, to make changes that would (1) prohibit medical debt from showing up on credit reports by enhancing protections in the Fair Credit Reporting Act (FCRA) and (2) ban the promotion and offering of deferred interest credit cards in health care settings. 

Key excerpts and findings from the CFPB report:  

“Many people would be better off without these products for two reasons: the financial burden can be higher and their ability to challenge an inaccurate bill is complicated when they are working through a third party financial institution.” 

“When people are unable to pay their medical bills, research shows this can deter them from seeking needed healthcare in the future. The use of medical cards and installment loans, and their promotion by medical providers, has ripple effects on the broader cost of healthcare, consumer wellbeing, and the economy.” 

  •  People paid $1 billion in deferred interest payments for these health care charges from 2018-2020. People used cards or loans with deferred interest terms to pay for almost $23 billion in health care expenses, and over 17 million medical purchases, from 2018 to 2020.  
  •  Between 2015 and 2020, people incurred interest on 20 percent of their health care purchases when using deferred interest cards.  
  •  For patients who pay off their full balance in the designated time period, deferred interest financing can be advantageous. For those who cannot pay the amount in full during the promotional period, however, the cost substantially exceeds the cost of other available credit. “As a result, people with low or moderate incomes who face the worst financial outcomes may be subsidizing those who can take advantage of the special financing periods.” 


About Community Catalyst:    

Community Catalyst is a leading non-profit national health advocacy organization dedicated to advancing a movement for race equity and health justice. We partner with local, state and national advocates to leverage and build power so all people can influence decisions that affect their health. Health systems will not be accountable to people without a fully engaged and organized community voice. That’s why we work every day to ensure people’s interests are represented wherever important decisions about health and health care are made: in communities, state houses and on Capitol Hill. For more information, visit http://www.communitycatalyst.org. Follow us on Twitter @CommCatHealth.