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Medical credit cards pose new threat to individuals

One of the leading contributors to bankruptcy for many Colorado residents is medical debt. Another large contributor to individuals' financial challenges is credit card debt, which can quickly overtake a person's personal finances. Even more troubling is the news that a new system is now combining medical debt and credit card bills; this combination may pose a big threat to those with financial vulnerabilities.

More and more health care providers are now offering medical credit cards in order to allow patients to pay off their medical and dental expenses. Many of the medical bills may not be covered by insurance, which has opened up the opportunity for health care professionals to urge patients to pay off the bills by credit cards. Others have cautioned against such credit cards, arguing that the cards exploit the doctor-patient relationship.

Often, these credit cards lure people in by charging low interest or no interest for a promotional period. However, if the debt is not paid in full, much higher interest rates, around 25 to 30 percent, can suddenly be imposed, leaving individuals mired in debt. There can be severe financial consequences if the person misses even one payment on the bill.

Fortunately, as with other credit cards, individuals have some recourse against aggressive debt collectors on these credit card bills. Debt collection agencies are prohibited from overly aggressive tactics and harassment. Moreover, by filing for bankruptcy, individuals can have a stay imposed against all debt collection activities, meaning the debt collectors may not undertake any action to collect on a debt during this period.

Accordingly, individuals who are deep in debt should contact a bankruptcy attorney to determine whether their rights have been violated by debt collectors. Individuals can then discover what their options are for dealing with the debt and gaining back their financial freedom.

Source: CNBC, "Patients mired in costly credit from doctors," Jessica Silver-Greenberg, Oct. 14, 2013

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