By Rachel Leland, Next Avenue
An 81-year-old Illinois woman recently encountered legal issues as a result of dental bills and contacted CJE SeniorLife, a nonprofit that provides services to older adults in Chicago.
Her dentist had advised her to undergo a $4,000 procedure and she believed she had secured a no-interest payment plan with the dentist’s office. However, she later discovered that she had unintentionally signed up for a deferred-interest financing option through CareCredit, the nation’s leading health and wellness credit card.
Despite her decision to forgo the procedure, CareCredit began billing her. Eventually, CareCredit billed her for the $4,000 estimated price, along with penalties and interest charges at an annual percentage rate of around 26%. The APR is 32.99% for new accounts, according to the company’s website.
CareCredit is a widely accepted financing option used by many medical and dental professionals since it allows them to get paid within two business days even if patients cannot pay their bills out of pocket. With 12 million cardholders, CareCredit is accepted at 270,000 provider locations nationwide and, on average, the company receives 19,000 credit card applications daily.
A 2023 CareCredit engagement study said that 95% of patient respondents rated CareCredit as having “good” or “excellent” value. However, critics argue that cases like the Illinois woman’s are distressingly common and contribute to the national medical debt crisis, which surpasses $220 billion, according to the Kaiser Family Foundation.
CareCredit, which is integrated in the software management at 80% of dental practices nationwide, offers deferred interest promotions where borrowers pay zero interest for a set period, usually six months or longer. Yet, interest is still accruing from the date of purchase.
Understanding Dental Credit Cards
If a borrower cannot pay off the entire balance of their purchase before the end of the promotional period, they will owe interest on the total purchase amount, not just the remaining balance.
According to the Consumer Financial Protection Bureau, patients often sign up for credit cards without understanding the financing terms or that the financing is with a third party and not a direct payment plan with the dentist’s office. High interest rates, credit score hits and debt collection lawsuits often follow.
Jennifer Silver, dentist and owner of Macleod Trail Dental, said that while medical credit cards help patients feel like they can invest in essential, high-cost procedures, they can jeopardize patient-provider relationships. Patients could later feel overwhelmed by the terms of the payment plans — especially if they did not fully understand them when signing up.
“While dental credit cards have helped many of our patients receive care that’s otherwise financially challenging, I believe transparency about terms and conditions is key,” Silver said. “For patients, these cards can be incredibly useful, but clear guidance and realistic budgeting are crucial to ensure financing works as a beneficial tool rather than a burden.”
Regulating Dental Credit Cards
In Illinois, fewer than half of residents have any dental insurance or enough to pay for many procedures. Coverage for dental expenses are generally not covered by Medicare unless there is an underlying medical condition. This reality positions medical credit cards as a way to obtain needed dental care that would otherwise be out of reach.
To protect consumers, in August 2024, Illinois Governor J.B. Pritzker signed into law HB 4891, which requires that patients receive full disclosure when third-party financing options are presented at the dentist’s office.
Per the law, patients must be informed that the financing plan is with a third party, not the dentist’s office itself, and warned about the potential consequences of interest-free promotional periods. Additionally, the dentist’s office is prohibited from filling out or submitting applications for these financing cards on behalf of the patient.
Patients Need Time to Think
“I think Illinois now has the model consumer protection law with regard to medical credit cards in dental practice in the country,” said Amy Zimmerman, associate vice president at Jewish United Fund, a social welfare nonprofit that worked with consumer and industry stakeholders as well as Illinois state legislators to advance the bill.
Zimmerman said that regulating dental credit cards at the state level is difficult to do, which is why HB 4891 focused on regulating dental practices and disclosures, such as prohibiting the offering of financing on a tablet.
Zimmerman added that when using a tablet, a patient’s information can be prepopulated before the patient signs up for the dental credit card. Once the patient is signed up, the dentist can immediately charge the card. These practices streamline the cash flow to the practice, but potentially at the risk of the patient not fully understanding the financing terms.
“It’s often given to a patient when they’re sitting in the chair where the work is going to be done,” Zimmerman said. “So that convenience of the tablet is really a convenience for CareCredit and for the dental practice.”
Illinois doesn’t prevent dentists from making patients aware of third-party financing options. Still, they do require that the practice ask the patient to read a disclosure form outlining the financing terms before signing on the dotted line.
In addition to educating patients on alternative financing options, the disclosure forms warn that the credit card is not a direct payment plan offered by the dentist’s practice and explain the consequences of not paying off the debt before the deferred interest period ends, Zimmerman said.
“Hopefully, it gives them that space to take the brochure . . . and then think about it,” Zimmerman said. “[The patient can] talk to family members, talk to friends, figure out if this is what they want to do.”
Protecting Yourself as a Patient
To keep costs low and stay out of debt, Ajdin Lekperic, chief experience officer of The Debt Relief Company, recommends comparing fees from different dentists and insurance plans to find the best deal upfront, avoiding credit card use.
All patients should ask about in-house payment plans and low-income individuals should seek dental clinics that offer sliding-scale payment options based on income. Finally, affordable care may be available at dental schools for certain services.
Though avoiding debt in the first place is ideal, if you must use a dental credit card, Lekperic says understanding how the company structures repayment terms to maximize profits is critical to avoiding racking up hefty interest charges.
Pay Thousands to Borrow Thousands
“If you have a $4,000 credit card with them, they’re not going to split up that $4,000 into a perfect 12 months,” he says. “They’re incentivized to leave you with a leftover balance at the end, because that’s how the issuing bank makes money.”
Lekperic advises that, in addition to being aware of the end date for the deferred interest period, patients considering a dental credit card with deferred interest should understand that making only the minimum monthly payments may not be sufficient to pay off the entire loan before that period expires.
Lekperic said that only making the minimum payments guarantees that borrowers will ultimately pay much more in interest and end up “feeling like a hamster in a hamster wheel . . . some people go past the ten-year mark in making minimum payments on their debts, and that’s when . . . $8,000 of dental work ends up costing $15,000 or $20,000, which is scary to think about.”
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