CareCredit Expands to Pet Paradise for Non-Veterinary Uses: A Closer Look

Let me start with a shout out to CareCredit.  For many years CareCredit has provided a financial safety net to pet parents facing the heart wrenching decision of knowing that their pet needed medical care and that their wallet and credit cards were empty and maxed out.  This safety net is probably responsible for many pets receiving critical care that they otherwise would not have.

That said, recently CareCredit, partnered with Pet Paradise to offer financing for non-veterinary purposes. Pet Paradise is a chain of 50 plus pet care facilities owned by the equity company Crane Group.   This expansion allows pet parents to use CareCredit at Pet Paradise locations to finance grooming, boarding, training, and retail purchases. While both CareCredit and Pet Paradise have celebrated this expansion as a way to make pet care more accessible, to others (myself included) it has also raised questions about the broader implications for small businesses and CareCredit’s original mission.

Pro’s of CareCredit’s Expansion

In the effort to seem balanced, there are some purported benefits to the expanded use of CareCredit:

1. Increased Accessibility: Pet owners who may struggle to afford more discretionary services like grooming or boarding now have the option to finance these costs, enhancing their ability to provide comprehensive care for their pets.
2. Convenience for Customers: By integrating CareCredit with Pet Paradise, pet parents (at least of Pet Paradise) gain the ease of managing all pet-related expenses under a single financing plan.
3. Revenue Growth for Pet Paradise: This partnership may increase customer spending, boosting revenue for Pet Paradise and potentially setting a precedent for other large pet service providers who might also want to partner with CareCredit.  To be fair, I included this as a pro, but I’m not really sure it is.

Con’s of CareCredit’s Expansion

That said, there are also some major cons to this change:

1. Dilution of Original Purpose: CareCredit was initially designed to alleviate the financial burden of necessary veterinary care. Expanding its scope to non-essential services may shift its focus away from its core mission.  This dilution could result in public perception issues, consumer confusion, and, if this dilution results in increased non-payment, potentially economic harm to CareCredit and ultimately reduced funds available for the core mission of covering unexpected veterinary costs.
2. Impact on Small Businesses: By partnering exclusively with Pet Paradise, CareCredit places smaller pet care providers at a disadvantage further increasing the imbalance between pet care facilities backed or owned by private equity and smaller family-owned pet care facilities.
3. Strain on Credit Resources: Allowing CareCredit funds to be used for non-veterinary purposes could limit the availability of financial resources for pet owners in genuine medical emergencies. Over time, this could undermine the program’s ability to fulfill its original intent.

Cost of Using CareCredit

It’s important to note that CareCredit is not a free service and that while CareCredit offers convenience, pet owners should carefully consider the associated costs. Financing plans typically include interest rates, which can range from 0% promotional rates for a limited time to standard rates of 15% to 29%, depending on the customer’s credit profile and the terms of the agreement.

Additionally, late payments or defaulting on the plan may incur fees ranging from $25 to $40, further increasing the total cost of using CareCredit. Consumers should review the terms carefully to ensure that financing aligns with their budget and financial goals.

When CareCredit was only available for veterinary care, pet parents appreciated that there was a cost associated with accessing critical care for their pets.  Using CareCredit for discretionary spending like grooming or retail purchases could lead to accumulating debt for non-essential services.

To be completely candid, Pet Camp and other pet care facilities exist because pet parents spend money with us; I’m not saying I don’t want pet parents to spend money at pet care facilities.  I am concerned about pet parents incurring debt and high interest rates.

Does Expansion Dilute CareCredit’s Purpose?

The expansion into non-veterinary financing does raise questions about CareCredit’s mission. Originally aimed at providing critical support for veterinary care, the service is now venturing into discretionary spending categories. While this may attract a broader customer base, it risks shifting focus from essential pet health needs to what some might refer to as “luxury” or at least discretionary services, potentially altering the brand’s identity and public trust.  Hey, I hear you – if CareCredit doesn’t care about this risk who am I to care? That’s a reasonable critique, but I still think there is value in preserving the original mission of CareCredit especially at a time when veterinary costs are going up so quickly.

Does Exclusivity Hurt Small Businesses?

Partnering exclusively with Pet Paradise may disadvantage small pet care providers. Without access to similar financing options, smaller pet care providers could lose customers to larger chains, further consolidating market power in favor of large corporations. This dynamic may reduce competition and innovation in the pet care industry over time.

Could This Expansion Limit Veterinary Care Funds?

Expanding CareCredit’s scope might strain its financial reserves, particularly if a significant portion of funds is allocated to non-veterinary uses. In times of high demand for veterinary financing—such as during disease outbreaks or emergencies—this could result in insufficient funds for pet owners in need of medical care for their pets. Ensuring a balanced allocation of resources will be critical to maintaining the program’s viability.

Conclusion

CareCredit’s partnership with Pet Paradise represents a significant shift in its operational focus. While the expansion offers clear benefits to Pet Paradise, it raises concerns about the dilution of its original mission, the impact on small businesses, and the potential strain on resources for veterinary care. At a time when veterinary costs are accelerating, there is reason to be concerned about pet parents incurring high interest rates for what might otherwise be discretionary spending.  CareCredit should take steps to ensure that pet parents are not burdened with debt and high interest rates; should consider taking steps to ensure that its relationship with Pet Paradise does not undermine small business; and most import, should guarantee that the expansion into discretionary services does not reduce the ability of CareCredit to be there for pet parents when the really need assistance.

Thanks for reading.

Pet Camp has been providing San Francisco’s dogs and cats with award winning service since 1997.  With three San Francisco locations, Pet Camp offers overnight care for dogs and cats, doggie day care, dog training  and enrichment options for dogs that don’t enjoy group play, pet transportation and bathing.  Family owned operated, Pet Camp is proud to be part of San Francisco’s small business community.