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Capital One is pulling out of the health care financing market -- closing the door on a financing option for medical services offered at nearly 30,000 health care providers nationwide.
Effective April 10, 2009, Cap One will no longer accept new installment loan applications. Nor will it modify existing loans. Spokeswoman Pam Girardo confirmed in an e-mail: "The decision was made based on a variety of factors, including the impact of the current credit and economic environment and the business' fit with Capital One's long-term strategic focus."
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In 2001, Cap One acquired AmeriFee, a company that had been financing orthodontic treatments since 1993. It later expanded to financing dental, vision, cosmetic and fertility treatment. On its Web site, the Cap One health care finance division billed itself as the "leading provider of financing for elective medical and dental procedures."
Doctors referred patients to Cap One through brochures, via phone or the Web. After providing information for a credit check, including their incomes, addresses and types of medical procedures, patients could get approval within 10 minutes from the lender. Depending on the borrower's creditworthiness, loans of $300 up to $40,000 were available at fixed interest rates ranging from 0 percent to 25.99 percent. Repayment terms were three months to 84 months. The fixed rate installment loans were considered a better alternative for patients than credit cards because they didn't carry some of the "gotcha" fees and interest hikes associated with cards.
Capital One sent letters out last week informing medical providers of the decision, which had some doctors' offices scrambling to sign up for competing health financing programs offered by Chase and GE Money.
According to the letter, medical providers must destroy all brochures and promotional materials and remove Web site links to the Cap One program by April 10. Existing borrowers will not be affected. "We will continue to work with (and service the loans of) our current customers," Girardo wrote.
[..]
Click here to see a full-size copy of the letter it sent to its network.
http://www.creditcards.com/credit-ca...-ends-1267.php
Effective April 10, 2009, Cap One will no longer accept new installment loan applications. Nor will it modify existing loans. Spokeswoman Pam Girardo confirmed in an e-mail: "The decision was made based on a variety of factors, including the impact of the current credit and economic environment and the business' fit with Capital One's long-term strategic focus."
[..]
In 2001, Cap One acquired AmeriFee, a company that had been financing orthodontic treatments since 1993. It later expanded to financing dental, vision, cosmetic and fertility treatment. On its Web site, the Cap One health care finance division billed itself as the "leading provider of financing for elective medical and dental procedures."
Doctors referred patients to Cap One through brochures, via phone or the Web. After providing information for a credit check, including their incomes, addresses and types of medical procedures, patients could get approval within 10 minutes from the lender. Depending on the borrower's creditworthiness, loans of $300 up to $40,000 were available at fixed interest rates ranging from 0 percent to 25.99 percent. Repayment terms were three months to 84 months. The fixed rate installment loans were considered a better alternative for patients than credit cards because they didn't carry some of the "gotcha" fees and interest hikes associated with cards.
Capital One sent letters out last week informing medical providers of the decision, which had some doctors' offices scrambling to sign up for competing health financing programs offered by Chase and GE Money.
According to the letter, medical providers must destroy all brochures and promotional materials and remove Web site links to the Cap One program by April 10. Existing borrowers will not be affected. "We will continue to work with (and service the loans of) our current customers," Girardo wrote.
[..]
Click here to see a full-size copy of the letter it sent to its network.
http://www.creditcards.com/credit-ca...-ends-1267.php
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