Historically, users use medical credit cards for so-called elective procedures, such as cosmetic dentistry, dermatology, vision, and at veterinary clinics. They are useful for patients who cannot pay a medical bill in advance.
However, lawmakers — led by Sen. Elizabeth Warren, D-Massachusetts — caution that the cards’ deferred-interest features are confusing and often result in consumers paying high interest rates after an initial promotional period ends.
They also warn that the cards are sometimes used instead of needs-oriented programs that hospitals and other health organizations should apply to a patient’s finances before forcing them into debt.
The US Consumer Financial Protection Bureau (CFPB, an agency that reports to the Treasury Department), had already highlighted these problems in a report issued in May. The CFPB hasn’t taken any action since the report came out, but consumer advocate groups are pushing for the agency to consider writing new regulations for medical credit cards.
“Our research shows that medical credit cards can pose a significant threat to patient finances. We urge the CFPB to take action to stop this damage,” Senator Warren wrote to the office. The letter was also signed by Bernie Sanders, a Democratic senator from Vermont, and Ed Markey, a Democratic senator from Massachusetts.
