As someone who has had way more medical bills than you probably will during your entire life, I know a thing or two about financing them. However, no matter how large a bill was I never once used the Care Credit card from GE Money to pay. Why is that? Because, in my opinion it is the absolute worst, most unethical credit card in all of America.
Care Credit vs. “Normal” Credit Cards?
This medical credit card is just that – a card that can be used to pay for services rendered at participating healthcare providers (according to their website, nearly 140,000 practices in North America accept it for payment). You can’t use it for purchases elsewhere.
However, unlike a “normal” major credit card, the GE Care Credit operates quite differently. The biggest difference is the way GE Money structures their zero percent promotional offers.
When a standard credit card issuers advertises a 0% introductory APR on purchases, that’s usually what you end up getting… 0% for the stated period of time – usually 12 to 18 months during which you owe no interest on anything you buy.
Contrast that to Care Credit, who technically offers 0%, but the catch is that in order to get it you have to pay off the purchase before the promotional window is over (which is usually 6, 12, or 18 months). With credit cards any unpaid balance would simply begin incurring the regular interest rate after you exited the promotional period.
The details discuss what happens when you don’t pay it off:
“On promo purchase balance, monthly payments required, but no Interest Charges will be assessed if (1) promo purchase balance paid in full in 6, 12 or 18 months, and (2) all minimum monthly payments on account paid when due. Otherwise, promo may be terminated and Interest Charges will be accrued at the Purchase APR and assessed from purchase date.”
So GE will charge you the interest retroactively on the full purchase price if you don’t pay off every penny of it within the allotted time frame. If you won’t be able to pay it off in time, you should transfer the balance beforehand to avoid the retroactive interest.When you look at the interest rate listed on the GE Care Credit card application, the deferred interest is a frightening possibility…
The Hook, Line, & Sinker
Now in all fairness, many department, home improvement, furniture and major appliance retailers use the identical “same as cash” promotional 0% financing trap on their credit cards and special financing offers. However, there are a few reasons I don’t consider the Care Credit product to be on higher moral ground due to keeping company with the other companies that employ this extremely punitive practice.
Reason #1: We’re talking about healthcare here, folks, not furniture or appliances
What makes this so morally repugnant is that GE Money is preying on people when they need help the most and often not in a position to make rational decisions like they might on some discretionary consumer purchase. Sure, there are many people who use the program to pay for cosmetic surgery and other elective procedures. However on the other hand, there are also many who use this credit card to pay for legitimate medical needs, like when they or their children have been in a terrible accident or have some dread disease that requires expensive treatment.
It’s bad enough to pull this financing stunt when someone’s buying a mattress or new TV, but is it really necessary to stoop so low when someone is using it because they don’t want to go in public since they have no teeth?! Come on GE Money, can’t you give people like that a better deal?
Reason #2: Many doctors line profit from these deals in a way that is shameful
My roommate had some cavities he needed to get filled and according to him, the dentist purportedly told him he had to do a credit check. In actuality it was far more than a credit check… a Care Credit Card arrived in the mail a few days later! My roommate was shocked, as he wasn’t aware he was applying for a credit card.
Do a Google search for GE Care Credit card reviews or Care Credit scam and you will see countless other alleged stories, similar to what happened to my roommate. Many practices won’t stoop that low, but they will get patients to apply for Care Credit using hard sells and half-truths (both of which I’ve heard first-hand).
But it doesn’t stop there… according to a lawsuit filed by Minnesota’s state attorney general, a chiropractor office allegedly “submitted applications in the patients’ names and falsified patient’s yearly income information to make sure they qualified” as mentioned in this New York Times article.
Reason #3: You may be charged for work that’s never done
Let’s say you were having a multi-part medical procedure done. I’ll use a dental implant as an example, since I happen to be in the middle of getting one. My treatment plan goes like this…
- Step 1: The tooth is extracted via a minor (yet expensive) surgery.
- Step 2: After 3 to 4 months of healing, there’s another surgery to screw the implant into the jaw bone.
- Step 3: After another few months of healing, it’s ready for the fake tooth to be placed atop the implant.
The total process takes about 9 to 12 months and this is fairly typical. If you’re paying out of pocket, the customary thing to do would be to pay just before each procedure is performed. I had step 1 completed in late spring and that’s all I had to pay for at the time (using my British Airways Visa card if you’re curious). Step 2 won’t happen until October and I won’t have to pay for that until right before the surgery.
However what’s been happening with medical credit card customers is that they sometimes are reportedly being charged upfront for their entire treatment plan (whatever it may be) before the work is actually done. Why do doctors and dentists get to do this when no other profession does? You don’t have to pay for college up front. Contractors don’t ask for everything all at once before they start. I just don’t get how they can get away with this kind of billing practice.
That’s just one of many complaints received by the New York Attorney Generals Office where customers were charged for work, even though the work had not been completed. Worse yet, there are even complaints where the medical practice went out of business, leaving the customer with a big fat medical bill and no work completed:
“A Bronx resident had $17,500 worth of implants charged to a CareCredit account up front by a dental provider. The provider went out-of-business before completing the work. CareCredit repeatedly refused the consumers requests to refund the money.”
Even if the doctor/healthcare provider doesn’t go out of business, what makes this particularly troubling is that when charged in advance, you might be paying interest charges that you otherwise wouldn’t be, if you were paying as you go.
Last but not least, let’s say you begin a treatment plan that’s been prepaid and decide it’s not for you. Will you get refunded for the remaining treatment you’ve paid for but not received? That might be a huge uphill battle.
Do medical credit cards ever make sense?
In short, probably not. At least not with the way they are currently structured.
We’ve already gone over why the Care Credit interest free financing is inferior. Why would you undertake the risk of their 6-18 month 0% deferred interest plan, when there are major credit cards that offer 0% on purchases for the same amount of time, but without the deferred interest trap? Almost anyone, regardless of credit history, should be able to find a better financing option.
So, could the Care Credit deal ever make sense? The only reason I can think of is if your credit score is so incredibly bad that no traditional bank would give you a non-secured credit card, then maybe a card from GE Money is the only option. But for the vast majority of people it just can’t be justified. Even if right now you think you will have no problem paying it off in time, what happens if your income or financials change later on? Don’t take the risk – what appears to be free could really come back to bite you in the backside.
GE Money does offer a fixed monthly payment plan without deferred interest, but even that seems like a losing proposition…
With this option, you will pay a flat 14.90% from day one (no deferred interest period). Is 14.90% the worst APR on the planet? No. In fact, it’s comparable to the purchase APR many major credit cards charge nowadays. However the fact is there are plenty of major cards out there with lower purchase APRs than that (plus they might toss in 0% for a period of time). So this second option from GE Money isn’t a winner, either, honestly. Just consider yourself warned next time you see an application for one of these cards in your doctor or dentist’s office and always know that you can do better by exploring other options.