As more New Yorkers turn to medical credit cards and third-party loans to cover out-of-pocket health care costs, the state is warning consumers to be cautious of financial traps that could lead to long-term debt.
In a new consumer alert, the New York State Department of State’s Division of Consumer Protection says these medical financial products—often offered in dentist offices and other care settings—may seem helpful up front but come with hidden interest rates, fees, and risks.
“While these products can provide short-term relief, it is critical to know your rights as a patient,” said Secretary of State Walter T. Mosley. “You need to be cautious of financial traps that could become extremely costly down the road.”
What are medical financial products?
Medical financial products include specialty credit cards and installment loans that are marketed specifically for paying health care bills. According to the alert, they are frequently offered by providers—sometimes when patients are in distress or unable to fully consent—and often include “no interest” offers that later balloon to rates as high as 30%.
Dental offices are one of the most common places these products are promoted, according to the National Consumer Law Center.
Common complaints include:
- Misleading “deferred interest” promotions
- Hidden fees or processing charges
- Patients feeling pressured to sign up while vulnerable
- Unexpected debt after emergency procedures
Know your rights before you sign
When receiving health care in New York, you have the right to:
- Clear, understandable information about treatment and costs
- Make an informed decision before discussing payment
- Refuse to give credit card information in advance for emergency care
- Be notified of the risks of using medical credit cards
- Decline any financing product that a provider tries to fill out for you
“No medical provider, including dentists, can fill out a credit card application for you,” the alert reminds consumers.
Tips to avoid a financial trap
- Ask questions: Know what you’re agreeing to before receiving services
- Read the fine print: Look out for interest rates and repayment terms
- Get it in writing: Ask for a copy of all agreements
- Track your payments: Set up reminders or automatic payments
- Report concerns: Suspect a scam or fraud? Contact the Consumer Financial Protection Bureau or NYS Division of Consumer Protection
Medical debt may still affect your credit
Although some laws protect consumers from having medical debt reported to credit agencies, ongoing litigation has created uncertainty, according to the alert. Bottom line: unpaid medical debt could still affect your credit score.
New Yorkers can reach the Division of Consumer Protection’s helpline at 1-800-697-1220, or file complaints online at www.dos.ny.gov/consumerprotection.
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