Medical Credit Cards Are Being Pushed On Patients

How Doctors Are Pushing Medical Credit Cards on Patients

Medical credit cards are increasingly pushed on patients across America as the costs of health, dental, and veterinary procedures rise. CareCredit had 12 million cardholders and 270,000 participating providers in 2024, up from 4.4 million cardholders and 177,000 participating providers a decade prior, according to a May 2023 report by the CFPB. “The growing promotion and use of medical cards and installment loans,” the CFPB wrote, “can increase the financial burden on patients who may pay more than they otherwise would pay and may compromise medical outcomes.” Revenue for the medical patient-financing industry was $15.3 billion in 2023, according to a report by the research firm IBISWorld, which found that as health care becomes less affordable due to rising premiums and insurance gaps, more patients are turning to medical loans or installment plans. [Time]

Americans Are Defaulting on Credit Cards at Record Levels

According to data gathered by BankRegData, $46 billion worth of credit card debt were considered write-offs by lenders in the first nine months of 2024. A creditor considers a debt a write-off when the borrower has defaulted on the loan, and is most likely unable or unwilling to pay back what’s owed. This amount of credit card defaults is at its highest level since the recession that began in 2008. According to data from the U.S. Bureau of Labor Statistics 2023 Consumer Expenditure Survey, the average household spent $77,280 on various necessary expenses (food, housing and transportation), which was up 5.9% from the previous year. When you consider the median income is $60,580 according to recent BLS data, it’s clear that middle-class households are, to say the least, stretched. [Yahoo Finance]

Capital One Sued by CFPB for Allegedly Cheating Customers Out of $2 Billion

The CFPB is suing Capital One, alleging the bank illegally misled customers by not notifying them of account options that paid higher interest rates. The federal government’s consumer watchdog claims Capital One’s practices meant millions of customers missed out on a collective $2 billion they could have made in interest payments. The CFPB accused Capital One of promising depositors that their 360 Savings account provided one of the nation’s “top,” “best” and “highest” interest rates but froze their rate at just 0.30% even as deposit rates rose nationwide. [Fox Business]

Apple in Talks with Barclays, Synchrony to Replace Goldman in Credit Card Deal

Apple is in talks with Barclays to replace Goldman Sachs as the tech giant’s credit card partner, as the Wall Street giant steps back from its consumer finance ambitions. Credit card issuer Synchrony Financial is also in discussions with Apple about the card partnership. Several financial firms are vying to replace Goldman, which launched the credit card with Apple in 2019. While other lenders are tempted by working with Apple, one of the world’s most recognizable brands, they also viewed the original deal terms as risky and unprofitable, sources told Reuters in December 2023. Negotiations between Apple and Barclays have been ongoing for several months. [Reuters]

CFPB Orders Operator of Cash App to Pay $175 Million and Fix Its Failures on Fraud

Today, the CFPB ordered Block, the operator of the peer-to-peer payments app Cash App, to refund and pay other redress to consumers up to $120 million and pay a penalty of $55 million into the CFPB’s victims relief fund. Block employed weak security protocols for Cash App and put its users at risk. While Block is required by law to investigate and resolve disputes about unauthorized transactions, the company’s investigations were woefully incomplete. Block directed users, who had suffered financial losses as a result of fraud, to ask their bank to attempt to reverse transactions, which Block would subsequently deny. Block also deployed a range of tactics to suppress Cash App users from seeking help, reducing its own costs. [CFPB]

Lululemon Sent $200 Gift Cards to ‘Impacted’ Customers amid L.A. Fires

Lululemon is doing its part to help those in need amid the devastating Los Angeles wildfires. Lululemon said, “We sent $200 e-gift cards to guests who have accounts with us with zip codes in the most impacted areas. We’re continuing to follow what’s happening and will evolve our approach to support how we can, and in the meantime our Southern California stores are also ready to help individuals displaced and in need of essential items.” [People]

Mastercard Agrees to Settle Pay Discrimination Suit for $26 Million

Mastercard is set to pay $26 million to settle accusations that the company has for years underpaid thousands of female, Black and Hispanic employees. The settlement will resolve claims that Mastercard underpaid roughly 7,500 employees across the country starting in 2016. Female, Black and Hispanic employees were paid less than their male and white counterparts for doing the same or similar work, according to the proposed class action complaint, which was also filed on Tuesday. Mastercard, the world’s second-largest payment processing company, on several occasions improperly assigned women and people of color to job levels below their experience, contributing to pay gaps, the complaint says. [The New York Times]

Do You Feel More ‘Pain’ if You Pay by Cash, Card or Mobile?

Mobile payments have also been found to affect spending in a similar way to using credit or debit cards. That is, spending tended to be higher when using mobile payments than cash. However, later studies have found this effect between cards or mobile payment and cash becoming weaker with time, suggesting that this may be because consumers have become more used to non-cash payment methods. Another reason may be the notifications about spending and account balances that flash up on a consumer’s watch or phone after payment. One study found that payment notifications can evoke pain of payment in the way that cash has been seen to. That is to say, consumers now tend to spend less when they get digital payment notifications flashing up an amount on their phone. [RTE]

Klarna Scores Global Payment Deal with Stripe to Expand Reach Ahead of Blockbuster U.S. IPO

Klarna has agreed a major new distribution partnership with fellow fintech unicorn Stripe, in a bid to expand reach and add more merchants in the lead-up to its upcoming listing in the U.S. The Swedish firm’s buy now, pay later service will become available as a payment option for merchants using Stripe’s payment tools in 26 countries. The new deal comes with improve functionality for Stripe merchants, including the ability to A/B test Klarna and measure real-time conversion rates. It comes after Klarna last year offloaded its own online checkout business, Klarna Checkout, to a consortium of investors. [CNBC]