An unexpected charge on her statement prompted one woman to call out CareCredit as a predatory scam. The TikToker who goes by localandvocal (@localandvocal) shared a video recounting her recent experience with CareCredit, which left her unable to make the minimum payment. Since its posting on Sept. 16, the video has gone viral, garnering over 584,000 views.
Localandvocal starts her video with a bold accusation. “CareCredit is a scam [and] not enough people talk about it so let me explain to you how they will [expletive] you like they [expletive] me with a bag of sand as lube,” she declared.
In her nearly seven-minute TikTok, localandvocal shares how a visit to the dentist uncovered the need for an expensive procedure. Unable to cover the costs on her own, she sought CareCredit’s financing service at the recommendation of the dental office.
“When approved, I am told that I am gonna get a 12-month 0% APR introductory rate. Cool beans, so I sign up for the card. I get the procedure, I pay for it that way. I figure at least I’ll pay it down, and then I just have to pay interest on the balance because that’s how this works. That’s how this has always worked,” she explained.
That’s what she thought—until she received her latest statement from CareCredit.
“I get a statement one day and my balance is hundreds of dollars higher. My first reaction is someone stole my [expletive] identity [because] I haven’t used this card for anything, but upon looking over the statement, I see that [the] hundreds of dollars increase is in interest,” she continued.
She sought answers but found more confusion
Confused, she decided to call CareCredit. Although the answer didn’t provide any additional clarity, one thing became clear to her. She’s in trouble.
“I finally got someone on the phone and I asked them, ‘I just had hundreds of dollars of interest charged to me all of a sudden. Are you charging me on like everything that I paid off in addition to the remaining balance?’” she said incredulously.
“I repeated my question and then he [told] me that my interest rate was 27%. That is when it really, really sank in. Oh, I’m getting [expletive] right now,” she continued.
After some further prodding, she finally got the answer she was looking for. It was far from the one she wanted to hear.
“That’s when he finally says ‘Oh no, we do charge you interest on everything you’ve already paid off. I’m sorry ma’am but please know that it’s just a one-time charge.’ I couldn’t pay off that one-time charge of almost $600 in interest so basically my balance now has gone up by $600. I can no longer afford the minimum payment and my minimum payment is almost $160, 96 of which—95 and change—is interest, not principle.”
Localandvocal ends her video with a warning for those considering CareCredit: “If you don’t have the money for a procedure that you need or a procedure that your pet needs, CareCredit might be your only option, but I’m here to tell you that [it] does not work like a regular credit card. It is, I think, along the same lines as a predatory loan and this is why one reason why […] it is so [expletive] expensive to be poor in America.”
What is CareCredit?
CareCredit, issued by Synchrony Bank, provides promotional financing for out-of-pocket healthcare services, including dental, cosmetic, vision, and veterinary care.
CareCredit offers two main types of promotional financing: reduced APR financing and deferred-interest financing. Reduced APR financing is straightforward. It requires borrowers to make fixed monthly payments at a lower interest rate until they pay off the balance in full. In contrast, deferred interest financing can be more complex.
With deferred-interest financing, borrowers can avoid interest on the principal if they pay the full balance within a specified period—typically six, 12, 18, or 24 months. This can be confusing as it is similar to a 0% introductory offer. However, while lenders often market both types of financing similarly, they are not the same. In a deferred interest plan, if the borrower doesn’t pay the principal in full by the end of the promotional period, the lender retroactively applies all accrued interest from the start of the balance.
Is CareCredit a predatory scam?
CareCredit has faced scrutiny in the past for practices considered “deceptive.” In December 2013, the Consumer Financial Protection Bureau (CFPB) ordered Synchrony Bank (then known as GE Capital Bank until 2014) and its subsidiary CareCredit to refund up to $34.1 million to consumers affected by its tactics. According to the CFPB, many consumers who signed up for the credit card received insufficient explanations of the terms. This led them to believe they were enrolling in interest-free CareCredit cards. In reality, the full balance will incur interest if not paid by the end of the promotional period.
Recently, CareCredit faced renewed scrutiny from lawmakers who urged the CFPB to take action against medical credit cards. During an April 2023 Senate Committee hearing, senators criticized deferred interest plans that caused consumers to incur high interest rates. The bureau acknowledged these concerns in a May report. However, the CFPB hasn’t taken further action against medical credit card companies.
The pushback against ‘predatory’ claims was swift
The comment section quickly filled with people who disagreed with localandvocal’s characterization of CareCredit as a “predatory scam.” Many pointed out that the fine print. Unless the balance is paid by the end of the promotional period, interest will be incurred on the entire amount.
“No 0% intro rate works like that. Interest is charged on the original amount back to the purchase date if not paid in full,” one commenter wrote.
“That’s not how that works. Read the fine print. […]The entire balance has to be paid or you owe the interest on the entire balance,” another replied.
“You didn’t really know how it worked, but that isn’t on care credit really is it?” someone questioned.
“Care credit has always been this way. We use care credit quite a bit [and] I have always known that the full interest would be owed if not paid in full on time, so we pay it in full on time,” another commenter added.
CareCredit responds to predatory scam allegations
When the Daily Dot reached out to CareCredit, they provided the following response:
“Healthcare is getting more and more expensive, and insurance doesn’t always cover the care people want. For more than 35 years, CareCredit’s convenient and transparent financing options have helped consumers access the health and wellness products and treatments they want as part of their healthcare journey. We provide a variety of clear and conspicuous disclosures to consumers as part of the application process that [helps] consumers understand what deferred interest is, what their individual payment terms will be, as well as the length of the promotional period.”
@localandvocal this is some 🐴💩 #poverty #viral #carecredit ♬ original sound – LocalAndVocal
In response to localandvocal’s allegations of being a predatory scam, they added, “In addition to disclosures, each cardholder receives a welcome call from CareCredit to provide further details on how the credit card and promotional financing options work. CareCredit cardholders receive clear reminders on their statements explaining how much they need to pay and by when, and what amount they would owe – including interest – if they do not pay in full by the end of the promotional period. Our customer service team is available to answer any questions or concerns our cardholders might have and we ask the content creator to reach out to our team by calling the number on the back of her card.”
We also contacted the localandvocal TikTok account in the comments but have not received a response.
