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A Medical Credit Card Has Surprising Costs
On Tuesday, the agency announced that it was ordering GE Capital Retail Bank and its CareCredit medical credit card unit to refund up to $34.1 million to pay customers who it said were victims of deceptive credit-card enrollment tactics over the last several years. More than one million patients who may have wrongly accrued charges on their card could be eligible for reimbursement.
Richard Cordray, the bureau’s director, said the agency had received hundreds of complaints about the card and found that many patients who were offered it thought they were signing up for an interest-free payment plan. But, in fact, they were applying for a deferred-interest credit card that had a no-interest promotional period of up to two years. Interest accrued during the promotion at an annual rate of 26.99 percent – much higher than a typical bank credit card, he said. If the balance wasn’t paid by the end of the promotional period, the patient became liable for the interest, resulting in “a very expensive loan,” he said.