A scary number of Americans lack health insurance or are underinsured. Medical bills are the single most common factor in bankruptcies. If you find yourself faced with an pricey procedure at the dentist, a specialist, or even at the vet for your favorite furry or feathered friend, the staff may point you toward medical credit accounts. These are easy to get credit specifically for medical and veterinary costs. They can seem like a tempting option, but, there are a lot of reasons to beware:

Many Patients Mistakenly Believe They’re Signing Up for an In-House Payment Plan

Some practitioners do offer payment plans in-house. Often, these will not include interest and will allow the patient to pay the cost off over a period of a few months. Carefully read before filling out forms so that you know what it is you are agreeing to.

The Terms Can Be Confusing

In the state of New York, the attorney general discovered that 90% of people who signed up for a medical credit account opted for an option that would cost no interest if paid in full. About a quarter of those wound up paying interest rates of over 26%.

Medical Cards Have High Interest

Generally, there will be a short no-interest period to pay back medical funds. But, after that, interest rates typically soar, with hefty fees for late payments. This is because these cards are usually given without checking your credit history. This makes them high risk credit, which can come with up-front fees or interest rates up to 30%.

A few ways to make sure that you don’t fall prey to high-interest medical cards:

• Build an emergency fund. This fund can keep you financially stable when dental, medical or vet bills come up.
• Ask for an in-house payment plan. Many offices are willing to accommodate your request if you ask.
• If you do need to borrow, check out other options first. A friend or relative may be willing to give you a less painful interest rate. Or, you may be able to qualify for a lower interest card.
• Look into sliding scale care. You may be able to find more affordable treatment at a sliding scale clinic and avoid going into debt.
• If you do wind up taken advantage of, contact your state attorney. In New York, the state attorney’s office has helped consumers by requiring a clear disclosure of interest rates, a three-day “cooling off” period before commitment, a grievance process and an appeals process for disputed claims. They estimate that their process will put $2 million back in the pockets of consumers who feel duped by medical credit companies.

As with any financial transaction, do your research before you sign on the dotted line. Education helps you protect yourself and your family against predatory practices and makes you stronger and more resilient.