But other loans may carry double-digit interest rates. The annual percentage rate on a typical medical credit card is 27 percent, the bureau found. The average rate for general purpose credit cards as of March 2023 was about 20 percent, according to federal data. Some lenders cited in the bureau’s report charge rates of up to 36 percent.
“It’s really alarming,” said Wesley Yin, an associate professor of public policy and management at the University of California, Los Angeles who studies medical debt.
Particularly troublesome is that some loans use “deferred” interest promotions, a feature that has waned in most purchase categories except medical care, the bureau said. Patients may receive a rate of zero percent for a few weeks or months, but if they don’t fully repay the debt by the deadline, they are charged interest retroactive to the start of the loan.
“It works — if you can pay it off before interest accrues,” said Caitlin Donovan, spokeswoman for the Patient…
This article was written by Ann Carrns and originally published on www.nytimes.com