This article appears in the June 2025 issue of The American Prospect magazine. Subscribe here.
Christopher Crim’s troubles started when his husband, who has cystic fibrosis and is in end-of-life hospice care, needed a tooth pulled. Crim took him to a dentist near their home in Tennessee, and while he was in the bathroom, the dentist pulled all of his husband’s teeth, not one, and left a bone sticking out of his husband’s gums.
The ensuing pain was so severe that his husband couldn’t sleep, even on morphine and oxycodone. So Crim rushed him to a new dentist, who estimated that surgery to fix the problem would cost $6,000. Crim and his husband didn’t have that kind of money. His husband is on Medicaid, but they couldn’t find any providers who would accept the dental coverage. Hospice has already forced them to sell their house and drain their savings. “Everything’s gone,” he said.
After the dentist agreed to shave a bit off the price, and after Crim pawned their wedding bands, he still faced a balance of about $1,500. That’s when he was taken into the back of the office, and a female employee told him he could cover the remainder with a CareCredit card. The cards, issued by Synchrony Bank, can only be used at participating providers to cover medical charges.
Immediately, Crim was approved for $1,500 in credit, and he remembers the woman telling him it was interest-free for the first year. She filled everything out on a computer and then handed him a stack of papers to sign. His husband was still in pain, waiting to be operated on. “We were in a hurry to get him back there and get his mouth fixed, so I just signed,” he said. He never got a copy of the paperwork. “He was suffering so bad, and I thought, ‘Whatever it costs, whatever I have to do to make him comfortable while he’s dying, I’ll do it,’” he said. “I couldn’t have been more vulnerable.”
Crim routinely paid above the minimum payment on his statements. Then, a couple of months ago, he said he got a bill from CareCredit, which stated that the bank was adding $700 in interest to the $900 he still owed. “I’m like, ‘Well, they made a mistake, of course they had to have made a mistake,’” he said. But when he called Synchrony, protesting that he was told the card was interest-free, he was informed that was only true if he paid the entire amount off before the year was up. Otherwise, a year’s worth of interest would automatically be added to the amount owed. He had never received any paperwork stating that, and all he saw on the company’s app was what he owed. “Nobody stressed to me, ‘You got to pay that $1,500 off in a year or you’re going to pay the interest,’” he said.
MEDICAL CREDIT CARDS OPERATE like retail credit cards you might get at The Gap or Home Depot, but instead of a cashier making the pitch at the checkout—a mildly annoying but hardly a life-or-death experience—a nurse or receptionist at a health care practice urges patients to sign up. “It’s a person who you want to be able to trust the most, but they’re deeply conflicted,” said Julie Morgan, a former associate director at the Consumer Financial Protection Bureau who researched medical credit cards.
Many people don’t even realize they’re being signed up for a credit card; they think it’s interest-free financing through their health care provider. Others aren’t given the chance to understand the terms. Most providers do all of the paperwork on a tablet, flashing it in front of a patient when it’s time to sign. Consumers report never getting any paperwork after the fact, either at the office or in the mail. And they often receive the ultimate hard sell, with no other choice but to sign if they want to get recommended care that, as in the case of Crim’s husband, they desperately need.
Some people may not even be aware of what’s happening at all until after they’re already signed up. In CFPB listening sessions, Morgan said, she and her colleagues heard of instances where people were given anesthesia and came out of it to find out they had been signed up for a card while they were under.
Medical credit cards are moving further and further into all parts of the health care system.
The bottom line is that medical credit card holders often have no idea what they’re getting into. “Had they known, [they] would never have signed up in the first place,” said Mona Shah, senior director of policy and strategy for Community Catalyst, a health care nonprofit, who has heard from people about their experiences.
That’s because, as Crim found out, medical credit cards have a nasty surprise that few consumers understand when they open accounts: Although the cards promise to be interest-free for an introductory period, typically a year, that’s only if consumers manage to pay off the entire balance before the period is over. Deferred interest, as it’s known, silently accrues the entire time and gets added immediately once the introductory period is up. That’s a hidden trap that could put people on the hook for hundreds or even thousands of dollars.
The typical medical credit card has an annual percentage rate (APR) of 26.99 percent interest, compared to an average of 16 percent for regular credit cards. Consumers who aren’t able to pay off the charges before the deferred interest kicks in end up paying about one-quarter more than the original amount they were charged. American consumers paid $1 billion in deferred interest between 2018 and 2020.
Then there are the junk fees. “There’s a lot of money in late fees,” said Chi Chi Wu, a senior attorney at the National Consumer Law Center. So much so that Synchrony Bank joined the Fort Worth Chamber of Commerce just ahead of a lawsuit against the CFPB’s rule that would have capped credit card late fees at $8 in a possible effort to help give the group standing in its favored court. That was before the agency, during President Donald Trump’s second administration, abandoned it.
Synchrony reported in a Securities and Exchange Commission filing that it made $3.7 billion in interest and fees from CareCredit accounts last year. In response to a request for comment, the company said, “Our financing offers include a variety of clear disclosures as part of the application process and on monthly statements that help consumers understand their deferred interest, individual payment terms and the length of their promotional period.”
There are other dangers for consumers. Once someone uses a card to pay for services, they give up the ability to negotiate over charges and dispute any billing errors, or even to have insurance coverage like Medicaid retroactively applied once they get it. Nonprofit hospitals are barred from aggressive debt collection tactics, but the financial institutions that collect on medical credit card debt don’t have to adhere to those rules. Some patients have been billed for future work they ultimately decided not to get—but still had to pay the charges anyway.
Medical credit cards can really ding credit scores, and not just by showing a hard credit inquiry. Wu pointed out that many patients are given lines of credit that match up exactly with the cost of a procedure, immediately maxing them out, which harms a credit score.
MEDICAL CREDIT CARDS ORIGINATED to cover so-called “elective procedures” that were unlikely to be covered by insurance. They’re commonly pushed in dentists’ offices and at veterinarians, where insurance coverage is spotty to nonexistent. Jeannie Lisak, a former dog groomer, opened a CareCredit card to cover care for her own dogs—she had five at the time, and now she has nine—because sometimes she just couldn’t afford the bill. “I’d do anything for them,” she said. “I would go without before my dogs would.”
Lisak thinks it’s possible she had the terms explained to her, but “I didn’t totally understand it,” she said. She kept using the card whenever one of her dogs would need something, typically once a month, and each payment would start a new interest-free period that would eventually end and hit her with interest. “The interest keeps adding on and adding on,” she said. She estimates she’s paid $5,000 in interest at this point.
Paying off that kind of amount means “I forgo things,” she said. “I would rather be pocket poor than not pay my bills.” She’d love to close out the card and not have to keep paying interest, but she needs it to cover the vet bills she can’t afford up front.
The cards have grown in usage dramatically in recent years. In 2013, 4.4 million people had a CareCredit card; that number jumped to 11.7 million ten years later. CareCredit is the most common medical credit card, but they are also offered by Wells Fargo and Comenity. There has been a “surge” in the last four or five years in particular, Shah said.
One reason for this growth is that medical credit cards are moving further and further into all parts of the health care system, including in hospitals and at primary care doctors’ offices. They’ve even started to expand into the “wellness” space, and cover products like weight loss semaglutides.
Many patients don’t even realize they’re being signed up for a credit card; some were enrolled while under anesthesia.
The cards offer concrete benefits for the providers who push them on patients. Although providers don’t receive the entire amount on the card, given that the bank takes its cut, the CFPB found that financial institutions market the cards as a way to get paid quickly, and to get people to approve costly care they might not otherwise agree to, or care that wouldn’t be covered by insurance. Instead of having to deal with the labyrinthine bureaucracy of health insurance billing to get paid far in the future, or even having to eat the cost entirely if someone fails to pay out of pocket or qualifies for charity care, practices get paid up front immediately. They don’t have to spend any time or resources chasing patients for payment and collecting on medical debt. Providers are also incentivized to get patients on cards with worse terms by being promised a bigger cut for certain interest rates or other features. CareCredit paid providers $12 million to promote its product in 2018.
In a statement to the Prospect, CareCredit said that it “requires all our partners to undergo training to learn how and when to discuss the CareCredit credit card clearly and transparently with consumers. This required training, as well as provisions in our contracts, prohibit partners from presenting our financing solutions to patients while they are being treated or during any type of impairment, to ensure that CareCredit is offered in a fair and compliant manner.”
The CFPB has previously taken action to curb the abuses consumers can face. After receiving hundreds of consumer complaints, in 2013 it forced CareCredit to pay $34 million back to consumers for “deceptive credit card enrollment tactics” that left consumers uninformed about the deferred interest. “Deferred-interest products can be risky for consumers in the best of circumstances, and today’s action ensures that CareCredit will no longer profit from consumer confusion,” then-CFPB Director Richard Cordray said at the time. In addition to reimbursing consumers, the company, owned at the time by GE Capital Retail Bank, also had to enhance its disclosures with better descriptions of deferred interest and warn consumers before the promotional period ended, as well as train anyone who marketed the cards.
But that order sunsetted under the first Trump administration. Complaints from consumers and lawyers started to recur. So in 2023, the CFPB, along with the Department of Health and Human Services and the Treasury Department, launched an inquiry into medical credit cards. Last June, the agency said it was “continuing to assess how financial institutions offer these products and whether they put borrowers at risk.” That was a signal that the agency was planning to supervise financial firms’ actions around the cards, as well as health care providers’ role, potentially teeing up enforcement actions against both.
But now the CFPB barely exists, an early victim of President Trump and Elon Musk’s DOGE operation. The new leadership has attempted to halt work and lay off most of the staff repeatedly, only to be stopped, at least temporarily, by federal courts. But even if the employees are saved, the agency is disavowing many of its powers and dropping its existing enforcement cases. The potential of the agency acting to protect new categories of consumers is dim at best.
“There are these really important protections that the agency has,” Shah said. “By gutting the agency, it really puts individuals at risk.”
A CFPB WITH AN INTEREST in protecting consumers could simply ban cards with deferred interest under the existing Credit Card Accountability Responsibility and Disclosure Act. Wu pointed out that the Federal Reserve did in fact ban deferred interest under the law after it was passed, before later reversing course. The law “prohibits retroactive increases in interest rates, but they wrote regulation to allow it,” she said. “It’s been really harmful.”
Michael Tomaso was disappointed to hear that the federal government isn’t likely to crack down on medical credit cards, even if he wasn’t surprised. He showed up at a Florida dentist in 2019 in search of preventative care. A specialist took him into a treatment room and began listing off all the services she said he needed, totaling $5,718 worth of work. She told him his dental insurance wouldn’t cover any of it, and then she mentioned opening up a CareCredit account, he said. The specialist started applying for him without explaining the terms. When he asked for copies of the paperwork she had shown him on a screen, she refused to give any to him.
“This was a way for them to get me to pay for some of the work, which would go into their pocket even if they knew I couldn’t pay it all off,” he said.
The growth in medical credit cards is fed by the fact that so many people in the U.S. are uninsured or underinsured.
The amounts he had to put on the card kept stacking up. The dentist eventually decided to stop taking insurance, which meant Tomaso was on the hook for $63 for every regular cleaning. He had a few cavities filled at a cost of over $1,000, and multiple times he had to go back within a year because the fillings fell out, costing him more. The dentist pressed him into getting add-ons like $50 fluoride treatments. “All that extra stuff is just a money grab for them,” he said.
Tomaso is on a fixed income, and he wasn’t able to pay off the charges before the deferred interest kicked in. That meant he paid $1,244.13 in interest in 2024 alone, according to a statement he shared with the Prospect. Since opening the account in 2019, “I probably have paid $5,000 or $6,000 in interest on about maybe $2,500, $3,000 worth of work,” he said.
He finally decided to pay off the card, which was no small feat—it meant reducing what he spent on food and clothing. “There was a period there where I was eating ramen noodles because that was all I could afford after I paid my credit card bill,” he said. He couldn’t always afford to put gas in his car. After it was all said and done, he estimates he paid four times as much as the original charges. That’s money he could really use today. “I’m still living with the consequences of it,” he said.
Some consumers have turned to private attorneys in an attempt to get relief. Last year, a class action lawsuit was launched against Synchrony Bank, the parent company behind CareCredit. Plaintiff S.G. opened a CareCredit card in 2021 to cover $2,000 in order to get emergency veterinary care for his cat, Pumpkin. According to the lawsuit, if he made the minimum payments on his bill, it would take him 14 years to pay it off and he would end up paying $7,752.
The lawsuit, which purports to cover anyone who has signed up for a CareCredit card and accrued interest at a rate of more than 16 percent, alleges that the bank is engaging in “unfair and deceptive business practices,” said Marc Dann, a lawyer representing the plaintiffs, and gets people to sign up “under duress.” The lawsuit also alleges that the interest rates the cards charge after the zero-interest period is over are usurious, in violation of some states’ interest rate caps and other protections. Sometimes, Dann’s firm will file a class action lawsuit and no other potential plaintiffs will speak up. That’s not been the case with this one: “We’ve gotten dozens and dozens of calls from people who are similarly affected,” he said.
CareCredit declined to comment on any pending litigation.
Synchrony includes a “very strong” arbitration agreement in its terms, a high hurdle for plaintiffs to overcome for class action status, Dann noted. Synchrony has already filed a motion to dismiss the case and to compel arbitration. The CFPB isn’t bound by such terms and could take enforcement action to protect all consumers—if it were interested in acting.
BEFORE TRUMP WAS RE-ELECTED, the CFPB was focusing a lot of its attention on the instances where consumers were signed up for medical credit cards when they shouldn’t have even had to pay out of pocket, such as those who qualified for financial assistance or were covered for the procedure through insurance, Morgan said. Those are “straight-up unfair or deceptive practices,” she said.
Venus has brought her own lawsuit after going through that very experience. Venus, who asked to use only her first name out of embarrassment about what happened to her, went to her dentist in California in 2022 for two teeth she thought were infected, and was told she needed to have multiple teeth pulled and to get dentures. The cost, she was told, would be $14,000, an amount she simply didn’t have. Her only source of income is $1,500 a month in disability benefits. An employee from the office told her she could apply for “credit” to cover it, which she was told was interest-free. She assumed it was some sort of loan or financing. She doesn’t remember being asked if she wanted to sign up. The employee just filled out paperwork for her on a tablet while Venus’s mouth was open with the dentist’s tools in it. She never got the chance to read the details or even sign her name.
She had both Medicaid and Medicare and told the dental office staff so, handing them her cards when she arrived. But the office never filed any charges at all with her insurance, even though the work should have been covered, according to her lawsuit. And because she had already paid for the procedure, she wasn’t able to submit her own claim afterward.
“I was expecting them to be honest,” she said. “I’m trusting them to know what they’re doing.”
KRISTOFFER TRIPPLAAR/AP PHOTO
Synchrony Bank, which makes cards for retail brands, is the parent company of CareCredit, the biggest medical credit card.
When Venus went back into the office a few days later, she told them she had changed her mind and didn’t want her teeth pulled. But she was told it was too late to change her mind. Not only did they pull teeth, but they pulled far more than she expected, including a tooth that had been fixed at her previous appointment and a tooth that hadn’t been bothering her at all. “When I found out, I was really upset,” she said. Venus wasn’t even able to use the dentures made for her against her will—they didn’t fit properly, which meant she couldn’t fully close her mouth and they cut into her gums when she ate. She said they made her look like “the donkey on Shrek.”
It was only about a month after her first appointment—before she had actually received the dentures—when she received her CareCredit card in the mail, with a lump-sum charge of $12,000, that she realized she had been signed up for a credit card.
Venus did what she could to pay it off, spending hundreds of dollars a month that sometimes ate up nearly a third of her monthly income. She had never before put more on a credit card than she could afford when the bill came due. To make payments, “I robbed Peter to pay Paul,” she said. Because her money was “tapped out” after CareCredit payments, she couldn’t afford groceries, so she started frequenting food banks. She had to borrow money from a friend to make her rent and car payments. She had to miss church events because she couldn’t afford the gas to get there. At one point, she was threatened with having her utilities shut off because she couldn’t pay the bill given how much she was paying to Synchrony.
“It made me feel kind of helpless,” she said. “I saw myself as stupid because I just got sucked into it.”
Eventually she was forced to stop paying because she couldn’t afford her basics. Venus’s lawsuit is a cross-complaint, filed after Synchrony Bank sued her to collect the debt, which it says is $5,045.81. Her complaint asks for a public injunction that would block her dentist from applying for financial products on behalf of patients while they’re being treated and for failing to bill insurance, plus another to block Synchrony from marketing and selling products through California dental providers. The bank hasn’t responded to Venus’s complaint yet.
CALIFORNIA PASSED A LAW that went into effect in 2020 that bans deferred interest on medical credit cards, while barring providers from filling out applications and signing people up for cards in treatment areas or while sedated. Venus’s lawsuit accuses her dentist of violating the law’s provisions. The original version of California’s bill would have gone further, by prohibiting providers from offering or promoting the cards at all. But the credit card industry and dentists lobbied to water it down.
With the CFPB dismantled and disempowered, “it’s up to the states now,” Wu said. States likely can’t go after the banks issuing the cards because they are preempted by federal regulators, but they can regulate whether, when, and how health care providers market the cards and sign patients up. Besides California, Illinois and New York have passed laws that rein in those practices. Lawmakers in Maine considered doing something similar, but Synchrony fought hard and, in the end, defeated the bill.
Ultimately, the growth in medical credit cards is fed by the fact that so many people in the United States are uninsured or underinsured. “They’re filling a void left by our incomplete health system,” said Elisabeth Benjamin, vice president at the Community Service Society of New York. In 2023, 26.4 million Americans were completely uninsured. Medical credit cards initially thrived in dental offices because so few people have dental insurance. A handful of states leave it out of Medicaid coverage, and Medicare mostly doesn’t cover it; dental isn’t a required coverage in Affordable Care Act plans.
High deductibles and co-pays leave even the insured with bills they can’t afford, and medical credit cards are pitched to fill in the gap. Meanwhile, as health care costs grow, so too does the ability to pitch a patient on paying for procedures with a credit card.
If the country had universal health care, as virtually every other developed country does, medical credit cards would likely have no market. “The reason that this is happening in the United States is that we have a for-profit health care system,” Shah said.
The surprise $700 in interest Christopher Crim said he had accrued after his interest-free period ended was money he simply didn’t have. His husband receives Supplemental Security Income, while Crim receives disability benefits. Crim has back problems that keep him from working, not to mention that he cares for his husband full-time.
“He’s my whole life,” he said. They live in a rented garage in their landlord’s backyard. To feed themselves, Crim buys six-packs of steaks and they eat them with rice every day. “We don’t go out, we don’t spend money on gas unless we absolutely have to,” he said.
Today, he still owes about $2,000. Had he known that he was at risk of owing interest if he didn’t pay off the charges within a year, he never would have signed up, he said. “I would have found some way to pay it.” Or, at the very least, he would have made sure to pay off his balance in time to avoid the interest. “I’m not dumb,” he said. “I’ve never missed a payment on any of my credit cards.”
“I cut the card up,” he said. “I’ll never use that card again once I pay it off. I’m done with it.”
