How Doctors Are Pushing Medical Credit Cards on Patients

David Zhao signed up for a medical credit card while supine in a dentist’s chair, fluoride trays in his mouth. In December 2018, the consumer lawyer from Los Angeles went for a routine dentist appointment at Western Dental in San Mateo, in the suburbs of Northern California. Zhao was told by the dentist that his gums were receding. He needed a special mouthguard or he’d have to have surgery, he recalls being told.

Zhao says he asked if the mouthguard was covered by insurance, and that office staff said that most of the cost was not. Instead, Zhao says, he was told he could sign up for a payment plan used by many of Western Dental’s patients. As he lay in the chair, Zhao recalls, an assistant came over with a clipboard and a document for him to initial. Zhao normally would have read each page of the document closely, scrutinizing the terms. But he had fluoride trays in his mouth and was stressed about his gum condition. “In hindsight, it was duress,” he says. After the appointment was over, he recalls, a Western Dental employee gave him a gift bag and escorted him out of the office.

Three weeks later, Zhao got a bill from Synchrony Bank, which owns CareCredit, the largest medical credit card company in the U.S. It was for $1,200. Among the charges on the statement, which was reviewed by TIME, were $425 for a mold made of his mouth and $290 for the contents of the gift bag, which included an expensive mechanical toothbrush Zhou hadn’t requested, he says. But that was just the first surprise.

Though the dentist’s office had told Zhao he was signing up for a payment plan with no interest, he says, in fact he had signed up for what’s known as a deferred-interest credit card, which charges no interest on payments during a promotional period, but imposes hefty fees on top of the original payments if the user doesn’t pay off the entire balance within that time. Zhao says he had to take out a chunk of his savings to pay off the card so he wouldn’t be charged 26.99% in deferred interest. “I never want to have anything to do with the dentist ever again,” Zhao says.

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Western Dental said it has no history of any complaints with Zhao’s account and that it could not comment further for this story. Synchrony Bank said it could not comment specifically on Zhao’s case, but said in a statement that its financing solutions are “transparent and clear” and that they have saved cardholders billions of dollars in interest over the years.

Zhao’s experience is not just the story of a bad encounter with a medical provider. It highlights the way medical credit cards are increasingly pushed on patients across America as the costs of health, dental, and veterinary procedures rise. CareCredit had 12 million cardholders and 270,000 participating providers in 2024, up from 4.4 million cardholders and 177,000 participating providers a decade prior, according to a May 2023 report by the Consumer Financial Protection Bureau (CFPB). “The growing promotion and use of medical cards and installment loans,” the CFPB wrote, “can increase the financial burden on patients who may pay more than they otherwise would pay and may compromise medical outcomes.” Revenue for the medical patient-financing industry was $15.3 billion in 2023, according to a report by the research firm IBISWorld, which found that as health care becomes less affordable due to rising premiums and insurance gaps, more patients are turning to medical loans or installment plans.

Medical credit cards may seem like a boon to both patients and providers. Doctors’ offices can get paid up front without needing to chase down clients for billing or insurance reimbursement, while customers can get approved on the spot to finance procedures they might not otherwise be able to afford. The “deferred interest” component, which touts zero-interest loans during the promotional window, may also appeal to customers at a moment when interest rates are high. CareCredit is not the only medical credit card—others include ScratchPay, Alphaeon Credit, and HealthiPlan.

Some cards can come with startling terms and hidden costs, consumer-protection advocates say. If consumers don’t pay off the balance of their card in the promotional period, they are charged all the interest that would have accrued since the original purchase date, at rates that can top 30%. CareCredit is the subject of a lawsuit seeking class-action status that was filed in New York in August 2024. It argues the card’s interest rates—32.99% in May 2024—violate state usury laws, which cap interest rates on loan payments. (Synchrony told TIME it could not comment about that lawsuit.)

“I don’t think people understand what they are signing up for,” says Elisabeth Benjamin, managing director of the Community Service Society of New York, a nonprofit research and advocacy group for people facing economic insecurity. “There are people who sign up for these CareCredit programs who don’t even have $500 in savings.” 

Sonia Romero, a nursing-home worker from Los Angeles, went to House Dental in South Gate, Calif., in September 2021 to see about replacing some of her missing teeth. She says her dental provider told her to sign some forms to determine her eligibility for a payment plan that would help cover the procedure’s costs, but never mentioned Synchrony or CareCredit. Romero says she signed the forms but ultimately elected not to have the procedure done. So she was surprised when, a few months later, she received a bill from CareCredit for $3,437. The provider had signed her up for CareCredit and charged her for a procedure she didn’t have—and she says that the provider would not remedy the mistake.

House Dental could not be reached by phone for comment for this story; multiple emailed requests for comment went unreturned.

Romero did not pay the bill, because she never even had the procedure. She thought the ordeal was over until September 2024, when she learned she was being sued by Cavalry SPV I LLC, a debt buyer, for unpaid debt. Cavalry says Romero now owes $4,231.82. She plans to contest the debt in Los Angeles court in July 2025. “I was vulnerable because I’m embarrassed about my teeth,” Romero says, “and they took advantage of it.”

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Romero’s case raises the question of whether problems with deferred-interest credit cards should be blamed on the card companies themselves, or on providers who allegedly mislead customers about what they’re actually signing up for. Benjamin and other consumer advocates say that unscrupulous doctors, dentists, and veterinarians sometimes push consumers into signing up for medical credit cards even when their insurance or Medicaid will cover the procedure, or when they could potentially get financial assistance from nonprofit hospitals.

Some providers sign patients up without properly explaining how deferred interest works—or making it clear that people are signing up for a credit card at all, says Joy Dockter, senior attorney at Western Center on Law & Poverty, which provides advocacy services in California. In such cases, Dockter says, it’s the providers, not the product they’re pushing, that is the primary culprit. Still, Dockter says, “the medical credit-card providers make it so easy for them to be bad actors.”

CareCredit said in a statement to TIME that all of its 270,000 participating providers must pass a training program that teaches providers how to explain that the product is a credit card, and to refer patients to disclosures about how the product works, the company says. CareCredit says that 80% of its cardholders pay off their balance before the promotional period ends, meaning they pay zero interest. People use CareCredit to purchase vitamins, beds, hearing aids, and fitness equipment, among other products, the company says. “For more than 35 years, CareCredit has offered convenient and transparent financing options that make health and wellness products and services more accessible for consumers,” the company said in its statement.

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Yet even if most CareCredit customers understand the deferred-interest promotion and pay off balances before the promotional period ends, the company is making significant money on those that don’t. The most recent public earnings report issued by Synchrony Bank states that the company’s Health & Wellness products, of which CareCredit is the largest, earned $956 million from interest and fees on loans in the third quarter of 2024, a 13% jump from the same period the previous year. 

Even the savviest consumers can be confused by medical credit cards. Michael Imboden, a 52-year-old IT specialist from Atlanta, signed up for a CareCredit card in early 2024 to pay for $5,400 hearing aids for his wife. Imboden says the paperwork did not detail many of the terms of the loan, including how much he would need to pay monthly in order to settle up within the promotional window and avoid deferred interest. He had to get a calculator and figure out the sum himself, since his bills just listed the minimum payment due and his balance. What’s more, Imboden says, while he was told he had two years to pay off his loan, in reality he had 23 months. “It’s a slippery slope,” he says. “They’re providing access to credit, but they’re also betting on people missing a payment or not reading the fine print.” He paid off the bill on time, but worries that others will be saddled with unexpected costs.

Medical credit cards with deferred interest often end up hurting people with lower credit scores, according to the CFPB. People with credit scores below 619 accrued interest on about one-third of deferred-interest health care purchases, according to the bureau, meaning that those customers were not able to pay off their cards before the promotional period ended. As a result, many wound up in debt. Eventually, if consumers miss too many payments, their credit score will be affected. If their debt grows big enough, credit-card companies often sue them over the debt. 

Debt-collection lawsuits often end up with a judgment in favor of the card issuers, says Chi Chi Wu, senior attorney at the National Consumer Law Center. In some cases, Wu says, that allows the credit-card company to garnish the customer’s wages or take money from their bank account. 

States have made attempts to more closely regulate medical credit cards. A California law that went into effect in 2020 requires the patient, not the provider, to fill out the application and prohibits them from doing so while under anesthesia. A bill passed in Illinois in August 2024 prohibits dentists and their staff from completing customers’ applications for third-party lines of credit and bans dentists’ offices from signing patients up for third-party credit cards with deferred-interest provisions. “I wanted to make sure that if you’re going forward with a deferred-interest credit card, you know what you’re signing up for,” says Margaret Croke, the Illinois state representative who sponsored the bill. The CFPB said last year that it was planning to monitor how financial institutions market their products to health care providers, looking especially at whether financial institutions are putting borrowers at risk.