Attorney General Bonta Warns Californians About Hidden Risks of Deferred-Interest Medical Credit Cards

OAKLAND — California Attorney General Rob Bonta today issued a consumer alert warning Californians about deferred-interest medical credit cards. Frequently marketed as “zero interest” financing options for dental and medical care, deferred-interest medical credit cards allow consumers to delay interest charges for a limited promotional period, typically for 6 or 12 months. However, if a consumer misses a payment or does not repay the entire loan by the end of the promotional period, interest can be charged retroactively from the date of purchase, resulting in large and unexpected bills.

“Deferred-interest medical credit cards can sound like a good deal — service today, pay for it later with zero interest — but that’s not always how it plays out,” said Attorney General Bonta. “Even one missed payment or not fully paying off your bill on time can mean interest gets added from the very beginning. That can quickly drive up the cost of care and leave people with debt they didn’t see coming. These cards are not the only financing option available, and consumers should carefully consider alternatives before signing up.”

In the consumer alert, Attorney General Bonta cautions that consumers should not allow a dentist or doctor to pressure them into signing up for a medical credit card they do not fully understand. Specifically, consumers are encouraged to take the following steps:

• If an agreement is not in a language you understand, do not sign it. Ask a trusted interpreter to explain the terms of any medical credit product offered to you.
• Shop around for other lender options, including your local credit union.
• Do not apply for medical credit cards while you are undergoing treatment, and do not allow yourself to be rushed into a decision. 

Consumers are also advised to take the following steps:

• If you have insurance, ask for only services that your insurance will cover.
• Consult additional dental or medical providers to compare costs and treatment options.
• Ask for a payment plan directly with your dentist or doctor instead of a “third party” lender. With medical credit cards, you are borrowing money from a third party, usually a bank, not from your doctor or dentist.
• Before applying for a medical credit card or loan for hospital care, ask the hospital about its charity care and discounted payment policies, and whether you qualify. Charity care helps Californians who qualify and cannot afford to pay their hospital bills. 
• See if you qualify for the Medi-Cal Dental Program, which provides free or low-cost dental services to eligible California residents, including checkups, cleanings, x-rays, fillings, and dentures.
• Consider low-cost dental care programs at California dental schools.
• Before applying for a medical credit card, it may be a good idea to talk to your family, community, or faith leaders to see if they can help you pay for your care. 

Under California law, only the consumer may apply for a “deferred-interest” medical credit card, and the application must be completed directly with the lender. State law prohibits dentists, doctors, or their staff from filling out or submitting applications on a patient’s behalf. Consumers who believe they have been misled or improperly pressured can file a complaint with the California Department of Justice at oag.ca.gov/report.