The Hidden Cost of ‘Zero-Interest’ Dental Care
Dental teams can help protect patients from costly surprises by explaining deferred interest, clarifying repayment terms, and ensuring patients understand their financing options before signing up.
When patients are faced with a significant estimate for much-needed dental care, many practices offer medical credit cards or credit services to finance the bill. But how well are patients educated on the terms of such services?
Medical cards with zero interest for a certain time period most often use deferred interest with an APR of 30%. What patients may not understand is that if they miss one payment over the life of the agreement, they are required to pay 30% interest on the entire amount borrowed, not just the balance. This can have severe financial consequences.
Regulators have responded to such practices. The Consumer Financial Protection Bureau (CFPB) has criticized how medical credit cards are promoted by healthcare providers, including dentists. The CFPB pointed out three major issues: deferred interest terms causing patient confusion, unclear payment allocation, and patients feeling pressured to sign up for credit cards during treatment. In fact, from 2018 to 2020, United States consumers paid $1 billion in deferred interest.1
As Medicare does not offer dental benefits and older adults are more likely to need higher cost dental work, these cards are highly utilized by seniors. And if the balance is paid within the agreed timeframe, they can be instrumental to receiving much-needed dental care. It all comes down to education. Informed consumers can make the decisions that are best for them. Dental practices may also want to consider offering a discount for paying cash, which may help some patients who are considering how to pay for treatment.
Dental teams who educate patients about financing options, including the fine print, are instrumental in providing ethical dental care and growing a loyal patient base. Click here to read more.
