At 26.99 percent, it sounds more like the vig ”“ the loanshark”™s cut ”“ than a credit card”™s interest rate. That GE Capital Retail Bank fee and the same fee with its subsidiary CareCredit L.L.C., indeed, caught the attention of the state attorney general.
Attorney General Eric T. Schneiderman announced June 3 a settlement agreement with GE Capital Retail Bank and CareCredit that requires “significant new protections” for consumers who use their health care credit card. It can carry an interest rate above 26 percent.
The agreement requires a “cooling-off” period to give consumers an opportunity to consider the card”™s terms and the medical treatment plan; a limit to what the provider can charge in advance; and transparency regarding high interest rates if the charge is not paid off at the end of a certain period.
The attorney general launched an investigation after fielding hundreds of consumer complaints of a range of problems related to CareCredit.
“The explosion of medical credit card debt is a major concern for many New Yorkers, particularly low and middle-income households and vulnerable seniors,” Schneiderman said. “The problem is made even worse by those who encourage high-pressure sales tactics in our health care settings and companies who charge outlandishly high interest rates. This agreement will help New Yorkers by stopping providers from charging large, upfront fees for future services and from glossing over the huge interest rates associated with CareCredit when promoting the credit card to patients.”
In New York, GE and CareCredit have authorized approximately 7,800 providers to accept CareCredit and have issued the CareCredit card to more than 535,000 New Yorkers. Dental work comprises some 60 percent of CareCredit”™s business. Schneiderman said about a quarter of those issued cards end up paying a 26.99 percent interest rate on their bills.
