In today's elective medical marketplace the predominant means for financing cosmetic medical procedures are medical credit cards. Credit card based patient finance programs can be a handy tool for financing small, repeat transactions but are not well suited for large, one time purchases such as a cosmetic procedure. Medical credit card programs are loaded with fine print, excess charges, and high default interest rates (usually close to 30%). Patients are generally sold the credit card option with a 0% promotion (usually 12 months) which is great but if the patient does not pay off the balance within the promotional period they have a big problem on their hands. Many patients have no idea that the default interest rate is so high and of course most of them do not take the time to read the fine print.
Medical credit cards don't just cause problems for patients, they cause problems for providers too.
When a patient gets their notice in the mail that the promotional period has passed and they see that they now have a 30% interest credit card, patients many times become angry at the provider for offering the program to them in the first place. In
addition, the provider gives up control of the patient transaction
because the credit card product can be used at any other provider who
offers the same program. That means that their marketing dollars might
benefit their competition. A provider gets the patient in the door; they get
approved for the credit card and then can use that line of credit at their competitor.
Patients and providers are both better served by a patient financing program that uses a closed-end, fixed-rate installment loan instead of a credit card. The provider keeps control of the transaction and patients have a loan with a low fixed rate of interest, a fixed payment, and set term. The patient is told upfront exactly how much they will be paying for the procedure with interest and because most of these program use simple interest, patients can pay off early with no penalty to avoid interest charges