The next time that you go to a doctor or a dentist, an invitation to apply for a medical credit card might accompany your bill. If you consider this option, you ought to apply healthy skepticism.
Medical credit cards are deferred-interest credit cards, which typically include a no-interest option if the balance is paid within 6–18 months. After that, rates rocket to at least 22 percent. What’s worse, those rates are applied retroactively. In other words, if you don’t pay off the balance before the no-interest period expires, then you’ll be charged interest from the day of your treatment.
Consumer Financial Protection Bureau has taken notice. In December 2013, CFPB ordered GE Capital’s CareCredit subsidiary to repay $34.1 million to at least 1.2 million customers. Customers, CFPB says, were misled into believing that they were applying for a no-interest loan or in-house financing.