Medical Credit Cards Collected $1 Billion in Deferred Interest From Patients Who Couldn't Pay in Time

A Cracked Tooth and a Brochure

Conor Keenan cracked a back molar biting into a burger at McDonald's in his early 20s. No dental insurance, one credit card, no cash reserves. The late-night Chicago dentist handed him a brochure for CareCredit, and he signed up on the spot.

He didn't find out about deferred interest until after the procedure was done.

How These Products Actually Work

Medical credit cards, including CareCredit (operated by Synchrony Bank), Wells Fargo Health Advantage, and Alphaeon Credit, differ from a standard Visa or Mastercard in one critical way. They advertise a promotional period, typically six months to two years, during which no interest is charged. Standard credit cards charge roughly 20% to 30% APR on unpaid balances every month. Medical cards defer that interest entirely.

If you don't pay off the entire balance before the promotional period ends, you owe all the interest that accumulated during that period — and not just on what's remaining, but on the original purchase amount, which includes what you already paid off. Miss the deadline by a dollar, and suddenly you owe significantly more.

According to Patricia Kelmar, senior director of Health Care Campaigns at US Public Interest Research Group (PIRG), this interest can be in the 30s, up to 39%. Kelmar has also noted situations where the minimum payment dictated by the credit card provider is actually less than the amount necessary to fully pay off the loan and avoid deferred interest — effectively setting up patients to miss the full payment amount.

The Numbers

From 2018 to 2020, medical credit cards financed $23 billion in healthcare expenditures, according to the New York Post's reporting. That pool generated $1 billion in deferred interest payments. The patients triggering those charges represented approximately 1 in 4 borrowers who took out the loans.

Keenan was not one of them. He cut dining out, ate rice and beans every Sunday, and paid the card off in full within 12 months. Zero interest. But his experience illustrates how fine the line is between the product working as marketed and it becoming an expensive mistake.

The Case for These Products

The strongest argument in favor of medical credit cards is straightforward: for millions of uninsured and underinsured Americans, the alternative isn't a better financial product. It's no access to care at all, or a medical bill sent straight to collections.

A young adult with no insurance, a maxed-out credit card, and a dental emergency doesn't have a lot of options. A promotional zero-interest financing window, if paid off in time, is genuinely free money from a bank. No fees, no interest, no penalty. Used correctly, it functions exactly as advertised.

Proponents also note that standard credit card debt at 20% to 30% APR would start accruing immediately, month one. A deferred-interest product at least gives the borrower a runway.

The Problem With That Defense

The $1 billion in deferred interest collected between 2018 and 2020 shows how that runway plays out in practice. One in four borrowers missed the deadline. These aren't wealthy patients who forgot to log into their account. The population most likely to use these products — the uninsured, the young, those with minimal credit access — is also the population least likely to have the cash flow to pay down a multi-thousand-dollar balance within a year.

The products are also marketed by a figure Keenan specifically described as an authority figure: the dentist's office staff. That's a different context from a bank mailing you a credit card offer. A patient in a dental chair, facing an unexpected bill, is not comparison-shopping financial instruments. They're being handed a brochure by someone in scrubs.

That context matters. The provider gets paid in full immediately. The bank collects if the patient misses the deadline. The incentive structure is not neutral.

According to a 2025 JAMA Health Forum analysis, about two-thirds of dentists' offices offer medical credit cards to patients. Podiatrists come in second place (45.7% of offices offer them), followed by chiropractors (29.7%), physical medicine and rehabilitation (25.5%), dermatologists (20.5%), pharmacists (18.3%), and imaging and radiology (14%). These products are also offered on hospital billing webpages, according to Kelmar.

What's Unresolved

The Consumer Financial Protection Bureau has examined deferred-interest products and medical credit card providers in the past, but the current regulatory posture on deferred-interest medical lending is not detailed in available sources.

The open question is whether disclosure requirements are sufficient. Keenan learned about deferred interest only after completing his procedure. If the mechanism were disclosed clearly before the patient signs — at the moment of financial decision rather than after — the one-in-four failure rate might look different. Whether that disclosure gap is a compliance failure, a design feature, or both is something regulators haven't definitively answered.