Recently a New York Times article http://www.nytimes.com/ * explained the cost of externally financed payment plans, that look like credit cards, offered by dentists and physicians.
“It might sound like a good idea at the time: You’re at the dentist’s office, and the receptionist offers you a way to stretch payments for an expensive procedure over many months, apparently with no interest.
More specifically it noted ‘…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… 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…”
“Providers like the cards because they get paid up front, but the cards can get unwitting patients into debt at a time when they may not be fully focused on financial details.”
“Many patients did not receive copies of the credit agreement… but relied on oral explanations from office staff members who often received little training.”
“ What should I do if I am offered a payment plan at a dental or medical office?
Make sure you understand the terms of the payment plan…… and insist on a copy in writing so you can review it later.”
*To read the full NYT story “A Medical Credit Card Has Surprising Costs by Ann Carrns , highlight and click on open hyperlink http://www.nytimes.com/2013/12/11/your-money/a-medical-credit-card-has-surprising-costs.html?ref=business&_r=0