Protecting the Rights of Consumers For Over 25 Years

The two largest medical credit card issuers in the United States are Synchrony Bank's CareCredit and Wells Fargo's Health Advantage. CareCredit has 12.7 million cardholders. CareCredit's rates are 26.99%, much higher than the average for all credit cards (16.27%). Wells Fargo's are lower, at 12.99%.

Consumers usually learn about the cards from health care providers. Synchrony in particular partners with medical providers to issue the cards The problem is that patients often have alternative payment options that are more affordable and offer lower interest rates, often as low as zero. Many major hospitals offer financial aid for those who cannot afford to pay, and monthly payment plans with little or no interest for those who can afford to pay over time.

Medical credit cards such as CareCredit impact a consumer's credit score more than alternatives. Medical credit cards are treated like any other credit cards for credit reporting. However, medical debts are treated more favorably. Equifax, Experian and TransUnion remove fully paid medical debts from credit reports. and beginning in 2023 will no longer include medical debt in collections less than $500 on credit reports. The credit limit on medical cards is often equal to the cost of the service, maxing out the card and hurting credit scores in the process. "Utilization" of credit is a major factor in credit scores. That is, if you have $20,000 in credit limits and use $5,000, you are treated more favorably than if you have $3,000 in credit limits and use $3,000.

Some of the medical credit card companies engage in questionable "no interest" promotions. They offer deferred interest offers, where interest accrues and is charged retroactively if the full balance has not been paid by the end of the promotional period. In 2013, CareCredit, then part of GE Capital Retail Bank, was ordered by the Consumer Financial Protection Bureau to repay $34.1 million to consumers who were victims of allegedly deceptive credit card promotions.