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What’s the deal with health care credit cards? Four things you should know

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Recently, many patients facing medical procedures have seen their health care providers suggest deferred interest rate credit cards as a payment option. Unfortunately, health care providers don’t always explain how these deferred interest credit cards work. We want to make sure that you get the facts you need.

Four things to know about cards with deferred interest rates

This type of credit card isn’t new. You may have seen ads on television, online, or in retail shops for promotional rates like zero-percent interest for the first year. No matter where the credit cards come from—a medical office or a mall store—they have a few features in common. Here’s what you need to know:

1. How to avoid paying interest

Make on-time payments each month and pay off your balance by the end of the promotional period. Minimum payments usually aren’t enough to pay off your entire balance by the end of the promotional period, so think about paying more than the minimum amount each month. Or, save up enough to pay the final amount before the promotional period ends.

2. What happens at the end of the promotional period

If you haven’t paid off the balance for your purchase when the promotional period ends, you’ll be charged interest on your balance for each month, starting from when you first made the purchase. Your credit card company must tell you the date by which you must pay off your balance to avoid paying interest. The date must appear on the front of your bill. If you aren’t sure when your promotional period ends, call your credit card company.

3. Using the card for other purchases

Before using the card again, check with the credit card company to see if you have a “grace period” and how it works. Without a grace period, you’ll pay interest on new purchases from the date you make them.

4. Details matter

Keep track of minimum payments and payment addresses to make sure small errors don’t add up to large interest and penalty charges.

Case in point: GE CareCredit cards

We brought an enforcement action against GE CareCredit to prevent deceptive and unfair credit card enrollment tactics. The enforcement action came after an investigation, where we found that consumers got incorrect information about how their cards worked, and later submitted complaints to us.

As a result of our enforcement action, all consumers enrolling in the CareCredit card in a health care provider’s office will receive a comprehensive “welcome” call from CareCredit within two to three days of enrollment. Certain consumers who sign up for a CareCredit card will speak directly to a representative prior to any enrollment or purchase of services. Additionally, CareCredit will enhance their disclosures to warn consumers when their promotional period is about to end. The company will also do more training of health care office personnel who offer the card. Finally, we ordered CareCredit to reimburse up to $34.1 million to customers who were victims of their deceptive credit card enrollment tactics.

Actions you can take

If you’re having trouble with a deferred interest credit card, you can submit a complaint online or by calling (855) 411-2372.

For more answers about how deferred interest medical credit cards work, check out Ask CFPB.

Know your financial adviser

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Just like planning for retirement, choosing a financial adviser can be much more challenging than it sounds—especially for senior needs. Today, we’re releasing “Know your financial adviser,” a guide to help you ask the right questions if you’re shopping for an adviser with a title suggesting expertise in senior financial planning. Titles like “veteran’s adviser,” “retirement adviser,” “senior specialist,” “benefits coordinator” or even “financial planner” don’t always mean the professionals are qualified to help you manage your money. Some titles require in-depth training, while others are easily picked up over a weekend.

For some military retirees, the decision is complicated even further by the need to find an adviser who understands the complexity of their retiree pay, veteran’s benefits, or disability benefits. This adviser should also understand the full financial impact of other benefits like TRICARE, commissary privileges, survivor benefit plans, and veteran’s service organization membership benefits.

Here are four things to think about when evaluating a financial adviser’s title or credentials:

  • How much training is required? Senior financial planning is a complex field which includes topics like estate planning, income tax laws, and investments. Some titles therefore require college-level coursework and passing tough exams, which can take many months or even years to complete.
  • Is your adviser qualified through a training program that holds its members to strict ethical standards? You should be able to file a complaint easily with the organization that issued your adviser’s financial title, as they may discipline or ban members who don’t follow the rules.
  • Is your adviser’s financial title accredited? Accredited programs have taken important steps to ensure the quality of their training.
  • Does the adviser have an extensive background working with a specialized group like military retirees? Just because someone calls themselves a veteran’s adviser doesn’t mean they know anything about military retiree pay systems, veteran benefits, or even the military, for that matter.

In addition to learning how to find a qualified financial adviser, you can also protect yourself by learning how to spot signs of potential financial fraud by phony advisers looking to exploit you.  You can download a copy of our previously released Money Smart for Older Adults – Prevent Financial Exploitation guide to help you spot the warning signs.

Most financial advisers have worked hard to earn the knowledge and skills required to help you. But credentials and promises alone don’t guarantee expertise or the quality of someone’s training. It’s up to you to look closely at the training, background, and quality of service when picking someone who promises to help you protect and grow your well-earned nest egg.

To learn more about our work on senior designations, read our guide.

Managing someone else’s money

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Millions of Americans are managing money or property for a loved one who is unable to pay bills or make financial decisions. This can be very overwhelming. But, it’s also a great opportunity to help someone you care about, and protect them from scams and fraud.

We are releasing four easy-to-understand booklets to help financial caregivers. The Managing Someone Else’s Money guides are for agents under powers of attorney, court-appointed guardians, trustees, and government fiduciaries (Social Security representative payees and VA fiduciaries.)

The guides help you to be a financial caregiver in three ways:

  • They walk you through your duties.
  • They tell you how to watch out for scams and financial exploitation, and what to do if your loved one is a victim.
  • They tell you where you can go for help.

You can also order free print copies (including bulk orders) online soon.

We’re working hard to empower older Americans to have a secure financial future. Sometimes family members, caregivers and others in the community must pitch in. We’re here to help you, too.

Banks can help spot elder financial exploitation and abuse

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An older Oklahoma resident began receiving sweepstakes offers in the mail after her 90-year-old husband moved into a nursing home. Just send $50, $100, $2000, even $5000 to claim your prize, they promised. When she asked a bank employee to help her send a large amount of cash in the mail, the bank investigated. It turned out the older customer had been writing as many as 90 checks a month to collect promised prizes that never materialized. The bank contacted the Postal Inspection Service to investigate and the authorities intervened.

A 98-year-old lawyer was scammed by a purported friend who loaned him office space and then accessed financial records stored there. When the older man was hospitalized for hip surgery, the 76-year-old friend drained $330,000 from bank accounts and used the money to pay for a trip to Puerto Rico and purchases at a variety of stores. Ultimately, the victim’s banks alerted authorities because of concerns about unusual activity on the accounts.

As we travel the country, we hear more stories of banks, credit unions, money transmitters, and other financial services providers spotting financial abuse targeted at older adults. Some of these are success stories like the ones we just shared: the financial institution makes a timely report, and authorities can prevent the theft, prosecute the perpetrator and help the victim.

But sometimes financial institution personnel are confused. They want to help protect the consumer, but are unsure whether privacy laws allow them to share a consumer’s personal information with law enforcement and other authorities that can take action.

That’s why today, along with seven other federal agencies, we released guidance on this issue for financial institutions. The guidance clarifies for banks and other financial services providers that reporting suspected elder financial exploitation to appropriate authorities does not generally violate the privacy provisions of the Gramm-Leach-Bliley Act, a federal law.

Reporting elder financial abuse is the right thing to do

Financial institutions often spot the red flags for abuse sooner than anyone else. We can only stop the financial exploitation of older adults through coordinated efforts at the community, state and national levels. Please join us in working to prevent, detect, and respond to this national problem and help prevent a disaster from happening to vulnerable elders across the country and in your community.

Meet Nora

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We’re really excited to introduce one of our latest team members, Nora Dowd Eisenhower, who will be serving as the head of the Office for Older Americans. We took a moment to chat with Nora – here’s a little bit about her story, and why she’s excited to be here:

Tell us a little bit about yourself.

Hi! I’m Nora. I’m originally from New York, but have lived in Philadelphia for twenty five years. My husband, Jim and I have loved living, working, and raising our family there. I started my career as a consumer lawyer and spent several years as the Pennsylvania Secretary of Aging.

Why did you decide to join the Bureau?

In a nutshell, it’s the combination of the people, the start-up environment, and the mission. I really like working with everyone here – I’m inspired every day because my colleagues are thought leaders in their worlds, and they’re all here at this moment in time, working towards a common goal.

What issues are you most excited to work on here?

I’m really interested in what I believe is a key issue for older Americans – aging and financial security. Around 10,000 people a day are turning 65 and will for the next 18 years. If we look at the key decisions that most people need to make during this time of life, we should be supporting people as they age with the best information, when they are ready to use it.

What do you see as the biggest challenge facing the community you serve?

The biggest challenge is figuring out what comes next for many older Americans as they turn 65. Some are retiring, some are re-entering the workforce, and others just want more flexibility and time to decide. We want to engage older Americans to think about their future and plot a course that will provide them, their families, and loved ones with later-life economic security.

To learn more about the work that Nora and her team are doing, follow us on Facebook for updates!

Dads have money lessons to share too

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When I think of Father’s Day, I naturally think of my dad, who turned 90 last month. I also think about the lessons I’ve learned that I try to pass down to my own kids.

Talking to your kids

I’m sure I’m not that different from others my age. We all share the same basic values we want our kids to succeed and we want to ensure that our aging parents are safe. But, we may not always be sure how to do that.

That’s why a few months ago, we shared questions and answers just for parents. We included common questions that children from pre-school to college might ask – from “Where does money come from?,” to advice to help your kids open a savings accounts, and your working teens or young adults enroll in their first retirement savings plan.

Talking to your parents

We’ve discussed the importance of parents talking to children about money, but it’s just as important for adult children to engage their parents. That’s why we also have several resources for older Americans and their families, and offer answers to older Americans’ common questions, including questions and answers on reverse mortgages, powers of attorney, and dealing with debt.

Recent data shows that debt is becoming a bigger issue for people 65 and older. And, that was certainly the case for my dad.

After my mom died, Dad suddenly found himself in charge of the bills. He wouldn’t think of asking for help, especially from his kids. He grew up during the Great Depression, survived World War II, and worked hard to raise, house, and feed his family. But, he wasn’t used to managing the money. When the washing machine or the lawn tractor broke down, he used credit cards to pay for repairs. A few years later, when he needed a new roof, I offered to help him shop for a loan. That was the first time I got a clear view of his debt.

We got the financing and then focused on a plan to manage his finances, including reducing his debt. We opened a savings account and set up an automated savings transfer from his checking account. It was a small amount that still allowed him to pay his bills and have some fun. Then, we looked at his credit card debt, compared options and determined the best way for him to start cutting down his credit card debt.  It took a few years, but we finally did it. Dad is still debt-free and has kept a small savings balance to handle household emergencies.

It’s important to talk with our parents about money, not only to make sure they’re coping with day-to-day finances, but also to prevent them from becoming scam victims.

People 60 years or older make up 15 percent of the population, but are estimated to account for 30 percent of investment fraud victims, one study says. There are other forms of financial fraud, too, from pushy phone solicitations to con artists pretending to be grandchildren needing money wired to them right away. That’s why we’re working to help older consumers and their families learn how to spot and avoid financial fraud.

This Father’s Day, give your dad (or mom) a call. If you don’t feel right bringing up the topic of money, ask for advice about your own money question to break the ice. The more you talk about money with your parents – or your children, the easier it will become and the more prepared they can be.