My dentist just told me they pay the interest for Care Credit ?

[Anonymous]

Trust me, they may be paying the interest, but they're not paying it. It's passed onto the customer.

The less-unreputable subprime car dealers do something similar.  They pay the finance company, and that is tacked onto the price of the car.

[Anonymous]

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@Anonymous wrote:

I am having a hard time believing this.  I am going to ask my dental clinic and see what they say.  We pay 200/yr for 2 people to have 2 cleaning each w/ xrays each year.  In addition to that you get half off or more all fillings, crowns, root canals, anything.

But again, think of all the people that don't understand how carecredit works.  They don't realize the interest is deferred.  And if I were a betting person, I am gonna say more than half of folks that do promos end up forgetting and pay the interest, and at that point, I am wondering if Care Credit shares a portion of that back with the practice.  That is what I want to know!

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Good points jfriend.

[fltireguy]

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@tussking wrote:

Well...I just answered my own my posted question...It's TRUE. The dentist or doctor does pay the interest on the 0% offers the offer...WOWSA.

Meanwhile they gave me a $3k CLI....

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I find that VERY hard to believe - that would be something I have never ever heard of before.

What they probably meant is that their DISCOUNT rate is probably considerably higher for a zero percent transaction than a regular revolving one. THAT would make more sense - I can say for a fact that CITI works that way with the private label card that my cmpany offers thru them.

They very easily could be paying 4.5-5% per transaction zor zero percent, vs. 1-2%, if that, for a transaction that will carry interest

[Anonymous]

http://hdcintranet.com/accelerate/documents/ortho/Care%20Credit%20Merchant%20Fees%20for%20Ortho.pdf  this should explain a lot of it...

[fltireguy]

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@Anonymous wrote:

http://hdcintranet.com/accelerate/documents/ortho/Care%20Credit%20Merchant%20Fees%20for%20Ortho.pdf  this should explain a lot of it...

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I think that was pretty much what I had said - except for the fact that the discount rates are astronomical for the 24 month zero percent!

 The merchant is NOT paying the interest!

But, looking at that document, this obviously is a cash cow for Synchrony.. (since we all know that XX percent of people will either not have the balance paid off in time and have to pay the 26.99% interest, which, actually equates to about 38% for good old Synchrony, when you factor in the merchant discount rate, plus the interest, or wil lmake one late payment and get RJ'd) 

But, it is also helping the doctors / practices, as there are essentially no bad debt, or collection problems

[UncleB]

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@tussking wrote:

I asked for a discount....She said no if I am using Care Credit because she pays the interest on the 12/0% promo ?

Seriously ? I'm having a hard time buying this one... Anyone ?

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My dentist actually told me the exact same thing (using the same terminology).  I assumed he was referring to the discount he has to pay (similar to the fee MC/V/etc. charge) but there might be something to this.

In my case my dentist is a really nice guy, and upon telling me this he noticed the look of concern on my face and told me it was no problem, that another patient had just put $7k on Care Credit (my payment was less than $1k).  The truth is if it wasn't for having Care Credit I wouldn't have had the work done (implant) so I guess in the end it's worth it to him.

[bostonte]

Yes, they pay for it. As do furniture stores, appliance stores, sewing machine shops, and other places offering these type of plans.

The merchant pays a substantial premium to "buy down" the rate on the account -- like prepaid points on a mortgage. The net present value of what the interest charges would be in whatever model the company uses to how people perform on their accounts.

The amount will vary based on the particular situation. Promotions from either the issuing bank or sometimes the manufacturer of a particular product may share the cost during the promotion period.

Depending on the terms in my experience they start at 3-4% on the low end and easily top 15% if you want to buy down to a 0% for 12-24 months not during a special promo period. One of my finance companies charges me even more surcharges beyond those based on the customer's credit tier.

In my industry it's common to have the manufacturer of the equipment split the charge on large purchases in the 6-12 months interest free during normal times (i pay 6, they rebate 3). They pay 3% of the awful fee (13.2+%) to go to 24. During a few periods a year they pay for all but 3% of the 12-24 on certain types of purchases.

Synchrony never codes the transactions correctly and you have to watch your charges like a hawk and dial into the disaster call center to argue to have things corrected later -- if they can even do it.

Plus there are tons of monthly fees for the specific equipment you need, fees per swipe, per day, per month, fees to "share" data with the manufacturer to apply promos, etc.

Of course all of that is not transparent to the consumer, but we all pay for it because I have to price the customer that wants interest free financing and all that requires into my prices.

And I'm contractually forbidden from offering a "waive the free financing discount" both by the finance company and the distributor agreement with the manufacturer -- and they regularly mystery shop and mystery call to enforce it.

Not to say it doesn't often benefit the merchant -- easy interest free financing does promote sales -- but our current system keeps so much of the bank profit centers hidden from consumers and does not give consumers the information they need to be informed shoppers.

[Creditaddict]

That's why some of the smaller businesses will only offer you 6 months or up to 12 but you rarely see the 24 and 36 month options that care credit does have!

I actually was sent the business side of the finance costs recently by mistake when I was looking to finance cabinets and depending what type of financing the company wanted to go with 0% for so many months vs. like 3.9 fixed for xx months it could get VERY costly for the company to offer it... I was a little shocked actually... some of the options from this finance company were charging the client over 29%.

[DieGo2SHAE]

Considering how much my dentist pushes people to use the card, I really doubt anyone is hurting when their customers opt to use it.

[Anonymous]

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@Creditaddict wrote:

That's why some of the smaller businesses will only offer you 6 months or up to 12 but you rarely see the 24 and 36 month options that care credit does have!

I actually was sent the business side of the finance costs recently by mistake when I was looking to finance cabinets and depending what type of financing the company wanted to go with 0% for so many months vs. like 3.9 fixed for xx months it could get VERY costly for the company to offer it... I was a little shocked actually... some of the options from this finance company were charging the client over 29%.

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well this goes to show you why care credit approves lower credit scores.  they know they will make more money off of them.  rich people with 800s pay cash, have great insurance, or use a rewards card to pay their medical bills. i know thats generalizing but still.  i have a few groups of friends, none of the six figure ones even know what credit is, and the other ones that either make less, or are frugal have care credit and rely upon it religiously.  Besides, I can use that 24 months and make money on that money not being tied up on that promo, or help out a family member with the card.

Idk.  This whole thread is kind of leaving me with a bad taste for synch, paired with all the shut downs etc. Hypothetically speaking if I did get that blue envelope today I could really care less and would close them all down. 

Still, I love their sams club mastercard.

Makes me think many merchants that have care credit should at least kinda push blisspay a little bit, no?