“Deferred interest credit cards are a profit-making scheme that needlessly leave patients and families in an endless cycle of debt.”
Executive Director Emily Stewart


April 26, 2023

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

BOSTON, MA — One hundred million adults — 41 percent of adults in the United States — hold some form of medical or dental debt. It is the most common type of consumer debt in collection — accounting for more than $88 billion. This debt often hides among credit card balances, loans from family, or payment plans to hospitals and other medical providers.

An alarmingly common “debt trap” can be found in the rise of deferred interest medical and dental credit cards. These deferred interest credit cards promise patients “no interest” or “0% interest” during a promotional period. However, if the entire balance is not fully paid off by the end of the promotional period, high interest rates are charged retroactively — starting from the date of the first charge. This even includes interest on portions of the balances that have already been paid off.

Deferred interest credit cards are risky for patients without savings. For such patients, an unexpected job loss or health care expense can prevent them from paying off the balance before the end of the promotional period – resulting in a vicious cycle of significant interest charges and even higher levels of debt. In sum, deferred interest credit cards can increase the level of debt for financially vulnerable patients.

This week, Community Catalyst is calling on the Consumer Financial Protection Bureau (CFPB) to “prohibit the promotion and offering of deferred interest credit cards in medical settings.” This is the latest advocacy push by Community Catalyst, which is leading a coalition of more than 60 groups demanding that the Biden-Harris administration take immediate action to address the medical debt crisis in America.

“The health and dental care industry in America is leaving far too many people and communities in debt. One impactful action the CFPB can take is prohibiting the predatory practices of medical and dental credit card companies,” said Emily Stewart, executive director of Community Catalyst. “Similar to payday lending, deferred interest credit cards are a profit- making scheme that needlessly leave patients and families in an endless cycle of debt. These unfair, deceptive and abusive practices are especially harmful to patients who are already struggling to pay their bills. Medical and dental patients should not be offered risky promotional financing to obtain the care they need.”

Following are some recent examples from the CFPB’s complaint database of patients who have been harmed by the deferred interest credit cards that they opened through their medical or dental provider’s office. These complaints are not outliers. Rather, they illustrate the significant risks when medical and dental patients finance their care with these products.

  • I opened this account at my doctor’s office through their receptionist. The terms that the woman described when I opened the account and the actual terms were completely different…No one ever showed to me or told me that if I didn’t pay off the full balance before the end of the deferred interest rate period, that my percentage rate would go up an exorbitant rate; this is criminal and should not be allowed.

    Case in point: my balance went up by [$2600.00] on XX/XX/XXXX, and I never even purchased that amount of charges in XXXX…I called the Care Credit XXXX owned by Symphony Bank and they said these are valid interest charges…since I did not pay the entire balance before the special interest charge deferment period ended.”
  • I signed up for Synchrony’s CareCredit card at my XXXX XXXXs office in XX/XX/2020. It was marketed to me as the interest-free 24-month install payment that can help me afford XXXX XXXX for less than [$100.00] a month. So I set up an automatic payment online as advised. Two years later this XXXX, I was charged over [$1,400.00] in interest. I called CareCredit and found out it was a deferred interest rate card. Even though I’ve made monthly automatic payments on my account, as long as I have any balance on my account by XXXX, I’d be charged a 26.99 % interest rate on the whole medical bill of {$2700.00}.

    Synchrony signed up most of their new customers through partners like my dental office, which are not always forthcoming to customers about the punitive interest rate policy and simply don’t have incentives to do so because they want people to sign up…”
  • My own experience with Care Credit started at XXXX XXXX XXXX XXXX. The office manager described Care Credit as insurance and created an account for me on her computer…she simply wrote down my account number on a sticky note and said I had 24 months to pay off all charges. I knew nothing else about Care Credit nor its policies and XXXX DXXXX simply used my Care Credit account number that was stored on their computer each time I visited. I thought Care Credit was connected to XXXX XXXX somehow.

    I recently was informed about Care Credits schemes. I called the company and, for the first time, was told that I had nearly [$700.00] of interest that had accumulated within 4 months during COVID-19. The [$700.00] interest was based on one [$2,000.00] charge. I called the XXXX XXXX office manager and she insisted that every charge had 24 months deferred interest as she told me in the beginning. However, she was wrong and Care Credit has forced me to pay high interest. The employees at medical offices are selling a product they know little about without fully disclosing the terms and conditions to their patients. Again, these activities should be illegal.”

Learn more about deferred interest credit cards and sign our petition to the Biden-Harris administration to provide relief to families with medical debt.

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.