A new addition to the FSA market, one which makes things much easier, smoother and paperless, is the FSA Debit Card. These are credit cards that are used to pay for any of the above expenses covered by your FSA account. Currently there are 7 million or more debit cards tied to a FSA accounts in the US. This includes almost one-third of people who have FSAs.
Flexible spending account debit cards, whether for health savings accounts or dependent care accounts, are very convenient in that they directly withdraw money from your account as opposed to you having to spend your own money or use your own credit card and then wait to be paid back. These FSA debit cards can also make it much easier to organize things too, especially if you use several credit or debit cards and want all your FSA eligible expenses on one bill.
There are several things you should keep in mind when deciding whether a debit card option is right for you and your flexible spending account:
– Do you earn “points” or other valuable rewards for using your regular credit card, and does the value of these perks outweigh the convenience of using an FSA debit card?
– In the case of Dependent Care accounts, does you provider take debit cards?
– In the care of Health Savings Accounts, how many in your family will be paying for eligible expenses? Is it easier to share a debit card or two or just continue with a system of using cash and existing credit cards?
– Do you tend to pay online for expenses? This can make the flexible spending account debit card option attractive.