Like many senior citizens with limited incomes, Dorothy Vreugdenhil of Turlock lost her Medi-Cal dental benefits in July.
She resorted to using her credit card to pay a dentist to extract eight of her teeth so she could have partial dentures. Then, three weeks ago, the credit card company said it was raising the interest rate on her card to 30 percent.
She'll have to wait on the dentures until she figures how to pay for them. She also canceled the MasterCard she relied on for car repairs or other unexpected expenses.
"I've lost about 15 pounds," said Vreugdenhil, 77, noting that she's unable to chew certain foods. "When your teeth hurt so bad, you have to do something."
Credit card holders of all age groups are being hit as lenders raise interest rates, penalties and fees before tough new federal laws go into effect in February. One credit counselor said he has seen consumers get stuck with interest rates as high as 42 percent.
Lenders say the increases are necessary because of losses from the bad economy and customers not paying bills, as well as the stringent regulations to come.
It can make things even tougher for seniors who have endured recent cuts to Social Security and health care. Many rely on credit cards to pay for medicine, home repairs or other necessities, senior advocates said.
Vreugdenhil said she had cavities under the caps on several teeth. She was not a big spender with her card, but charged a little more than $2,000 to pay the dentist for pulling the teeth. The cost for the partial dentures is an additional $3,300.
The card company did not offer much explanation for raising the rate on her AT&T Universal MasterCard from 18 percent to 29.99 percent on new purchases, she said. She paid the bill on time, paid more than the minimum payment and feels she didn't do anything to raise a red flag with the lender.
Her balance is about $3,000 on an account with a credit line of $23,700.
Vreugdenhil canceled the card and will try to live without plastic for a while. "I think it is usury," she said. "They had already raised it from 14 percent to 18 percent this year."
The sudden hiking of interest rates and fees is legal, but won't be under the new regulations, intended to stop deceptive and unfair practices of card issuers.
"It is not just affecting seniors, it is affecting every demographic," said Bruce McClary, a spokesman for ClearPoint Credit Counseling, a nonprofit that offers credit counseling and education to consumers.
McClary said card issuers seem to be targeting customers perceived as a risk. Indications such as a change in spending pattern, a late payment or a balance of more than 30 percent of available credit are red flags for card issuers. But even good customers are seeing increases.
Shop around for lower rate
Consumers with good credit can try to undo the damage by shopping for a card with a lower rate. Credit card companies still are taking new customers and are allowing them to transfer their balances to new cards, McClary said.
"If your credit rating is not so good, you can call the card issuer and try to negotiate the rate down," he said. "Tell them why you need to have a lower rate, that you've been a loyal customer for a long time and made payments in a timely manner."
Under the new rules, companies won't be able to increase rates unless a customer falls behind on payments or the terms of the contract allow increases. Terms and conditions of credit cards will remain in effect for a year.
Putting medical expenses on a card is usually more costly than agreeing to a payment plan with a health care provider, McClary said. Medical or dental offices often charge no interest or lower rates than credit cards.
Effective Jan. 1, a new California law places regulations on "dental cards" being marketed since adult Denti-Cal benefits were all but eliminated in July. For example, the law makes it illegal to bill card holders for a series of visits even before the dental work is done.
Vreugdenhil, who is estranged from her adopted children, lives on Social Security and a small pension from her ex-husband's military service. She is weighing options such as paying $47 a month for a veterans Tri-Care dental plan or trying to make payments to her dentist.
Long wait for help from state
Adult Medi-Cal patients likely face a long wait for the financially troubled state government to restore the dental benefits.
Advocates suggest that affected seniors or the disabled consider buying a stand-alone dental plan through an insurance broker. Another option might be Medicare Advantage plans, which cover medical services and prescription drugs, plus dental coverage for an extra $15 to $25 a month. The premiums for Advantage plans in Stanislaus County range from zero to $109 a month.
Medi-Cal patients switching to a Medicare Advantage plan may have to change doctors and would give up their current prescription drug coverage.
The California Department of Aging's Health Insurance Counseling and Advocacy Program offers counseling on Medicare and Medicare supplement policies. Contact a local HICAP office by calling 800-434-0222.
Bee staff writer Ken Carlson can be reached at firstname.lastname@example.org or 578-2321.