TODAY   |  December 13, 2013

New warnings issued on medical credit cards

Consumer advocates suggest reading the fine print before signing up for a medical credit card in a doctor’s office, after hundreds of complaints were submitted. NBC’s Tom Costello reports.

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>>> important consumer alert. this is a warning to be ware of credit cards you're encouraged to sign up for in your doctors office. tom costello has been looking into this story. good morning to you.

>> reporter: good morning. we're used to turning to our doctors and dentists for advice but now offices are offering medical credit cards after telling patients they need a procedure or hearing aid . they look like a normal credit card but there could be a big catch . just imagine you're in the dentist chair, your tooth is aching in the person in the mask says you need thousands of of worth. no insurance, no problem. he has a shiny new instrument. a medical credit card .

>> you're actually just trying to get your teeth fixed.

>> reporter: sandy brown thought it made sense facing extensive dental work and no insurance she signed up for a medical credit card in the dentist office but then 18 months later a surprise. the balance jumped from $2,600 to more than 4,000. the warning was in the small print . don't pay off the balance and get hit with a penalty, nearly $1,500. and her interest rate suddenly jumped from 0 to 30%.

>> 30% almost is outrageous. i just think that that's criminal.

>> reporter: the new york attorney general has received hundreds of complaints.

>> you don't expect your health care professional who you are trusting with your health to steer you wrong when it comes to something like this.

>> reporter: it's a good deal for the doctor who is guaranteed to get paid for his or her work but customers are encouraged to sign up when they're most vulnerable.

>> because the clinic is signing people up they don't always expose the hidden terms or trip wires. you don't always expect them to be pedaling a credit card .

>> reporter: in new york the ag reached a agreement with ge capital retail bank that is providing patients with a 3 day cooling off period and no more rebates to doctors and dentists who drum up business for the credit card and clearer information about business rates . and ge tells nbc news it continually enhanced transparency and 80% of its card holders pay off the full amount and never pay interest. ge did issue some customers refunds. sandy brown got the $1,500 taken off her bill. but consumer advocates caution anyone considering a medical credit card should read the fine print .

>> this isn't a good solution. people are late on the payments or miss a payment it's going to jack up the cost of the care dramatically.

>> reporter: they're also paying the consumer financial protection bureau $34 million to settle federal complaints. medical credit cards can be a helpful solution for some people that can pay off the bills on time but shopping around before signing on the dotted line, sometimes asking your bank for a small loan at a low interest rate could be a better deal.

>> that is good advice. tom costello on the story. thank