State officials have reached a settlement agreement with GE Capital Retail Bank that implements new protections for consumers using CareCredit, a health care credit card that can carry an interest rate of more than 26 percent.
The agreement requires CareCredit — a subsidiary of GE Capital — to wait three days before charging transactions valued at more than $1,000. The waiting period is aimed at giving consumers an opportunity to consider the card’s terms and the treatment plan, while including transparency requirements that will make cardholders aware of high interest rates for charges that are not paid off at the end of the promotional period.
“The explosion of medical credit card debt is a major concern for many New Yorkers, particularly low- and-middle income households and vulnerable seniors,” Attorney General Eric Schneiderman said in a statement. “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.”
In addition, the settlement will ban charges for services not yet rendered, ensure providers accurately describe the terms of the CareCredit card to consumers, and add clear language at the top of the card application informing cardholders of the interest rate once the promotional period lapses. The agreement followed an investigation into CareCredit by the Health Care Bureau of the Attorney General’s Office, which began after hundreds of consumers complained of a range of problems related to CareCredit.
“This agreement will help New Yorkers by stopping providers from charging large, up-front fees for future services and from glossing over the huge interest rates associated with CareCredit when promoting the credit card to patients,” Schneiderman said.