Doctors push medical credit cards, spark investigations

Imagine this unsettling scene.  You lie in the emergency room of a hospital.  After being hit by a drunk driver, you are critically injured. Barely conscious and in tremendous pain, you find out that your insurance company will cover only some of the costs of your vital surgery.  Realizing the gap of coverage and your inability to pay for it, your doctor pulls out a credit card application and says, “Don’t worry. We offer this great medical credit card that is interest free.  Just sign here on the dotted line, and we’ll get you put back together in no time.” As you sign the agreement, your doctor smiles, elated that he gets some payment upfront and that he gets a kickback from the creditor.  

This scenario dramatizes a growing problem: doctors pushing medical credit cards. In fact, the number of complaints about doctors promoting medical credit cards has risen in recent months.  Some of the complaints are so outrageous that they have sparked the ire of New York Attorney General Andrew M. Cuomo, who recently announced an investigation into the health-care lending industry. Other state attorneys are pursuing rogue doctors who take advantage of patients, many of which are not fully aware of the credit card terms.

Maximize relief dollars, remove transaction fees

It has been done before: credit card companies temporarily suspending transaction fees to maximize the dollar amount of donations going to help disaster relief and recovery efforts.  Given the catastrophic proportion and immediacy of Haiti’s need, it should be done now.

When disaster occurs and private donations abound, credit card companies reign in a considerable amount of money through transaction fees.  Companies such as Visa, which has come under fire for its high transaction fees, make about three cents of every dollar donated.  Visa and other companies will likely rake in millions of dollars of profit as a result of the donations made via credit card for the Haitian relief efforts.  

Instead of eagerly watching their bottom lines swell, credit card companies should cease this opportunity for humble leadership and partial redemption.  While the existence and convenience of their processing infrastructure is certainly valuable and has an associated nominal cost, the need for every penny of relief is most important.

Join me in demanding that credit card companies suspend their transaction fees to maximize relief efforts in Haiti. 

For more information about how much credit card companies will profit, read an article released today in the Huffington Post.

Deal or no deal: A truce for anxious credit card companies

Contrary to popular belief, there is a way for credit card companies to better manage their risk without lowering responsible customers’ credit limits.  In fact, the solution is quite simple and well within the means of credit card companies that are losing good customers due to bad policies. 

Simply put, credit card companies can offer its responsible customers a reduction in purchasing capacity to a reasonable level and for a certain time period after which a review will take place.  By doing this, companies can mitigate any immediate opportunities for increased debt while not harming a customer’s credit score. 

Three things credit card companies must do, especially now

Paralyzed by their fear of a deeper credit crisis, credit card companies are missing a huge opportunity. Instead of engaging in ill-considered practices such as increasing rates and reducing credit lines without proper notice, companies like American Express, Citibank, and Capital One must improve their customer service, maximize public relations opportunities, and increase their consumer educational efforts. In doing so, they will lessen the catastrophic damage to their brands caused by a growing number of angry customers.  

What exactly should companies do?  

First, they must quickly and appropriately respond to upset customers.  Once a model for excellent customer service, American Express, for example, has taken a turn for the worse.  Customers cannot get straight answers --if any at all; loyal and longtime customers are treated with little respect; and customer service representatives are increasingly hostile.  By giving an honest, respectful, timely, and empathetic response, companies will maintain some degree of rapport with more customers.