Rx for Costly Credit: Deferred Interest Medical Credit Cards Do More Harm Than Good

Abstract

Various health care providers offer patients medical credit cards that charge high rates of deferred interest. As the cost of medical care and patient responsibility for out-of-pocket costs continue to rise, patients have turned to medical credit cards for help footing the bill. Unfortunately, because they fail to pay off their balances before the end of the promotional period, many patients find themselves unexpectedly responsible for deferred interest charges at rates well above those associated with general-purpose credit cards. Medical credit cards fall outside the protection of many federal credit laws regulating consumer credit. This Note argues that the Consumer Financial Protection Bureau (CFPB) should ban deferred interest medical credit cards through the exercise of its rulemaking power. Short of a total ban on deferred interest medical credit cards, the CFPB should use its rulemaking power to expand the reforms it recently levied on GE CareCredit to the entire medical credit card industry.