Editing Debit card (section)

====FSA, HRA, and HSA debit cards====
In the United States, an [[FSA debit card]] only allow medical expenses. It is used by some banks for withdrawals from their  healthcare<ref name=FSAvsHSA_rollovers>{{cite news|newspaper=[[The New York Times]]|url=https://www.nytimes.com/2013/10/29/your-money/an-autumn-check-of-your-flexible-spending-account.html|title=It's Autumn, Time to Check Flexible Spending Accounts|author=Ann Carrns|date=October 29, 2013|access-date=July 28, 2022|archive-date=July 29, 2022|archive-url=https://web.archive.org/web/20220729020952/https://www.nytimes.com/2013/10/29/your-money/an-autumn-check-of-your-flexible-spending-account.html|url-status=live}}</ref> FSAs (Flexible Savings Account)<ref>{{cite news|newspaper=[[The New York Times]]|url=https://www.nytimes.com/wirecutter/money/change-fsa-contributions-coronavirus/|title=You Can Now Change Your FSA Contributions Midyear. Here's What You Need to Know.|author=Sally French|date=July 1, 2020|access-date=July 28, 2022|archive-date=July 28, 2022|archive-url=https://web.archive.org/web/20220728220648/https://www.nytimes.com/wirecutter/money/change-fsa-contributions-coronavirus/|url-status=live}}</ref> [[medical savings account]]s (MSA), and [[health savings account]]s (HSA) as well. They have [[Visa (company)|Visa]] or MasterCard logos, but cannot be used as "debit cards", only as "credit cards". Furthermore, they are not accepted by all merchants that accept debit and credit cards, but only by those that specifically accept FSA debit cards. Merchant codes and product codes are used at the point of sale (required by law by certain merchants by certain states in the U.S.) to restrict sales if they do not qualify.{{citation needed|date=December 2016}} Because of the extra checking and documenting that goes on, later, the statement can be used to [[Balance sheet substantiation|substantiate]] these purchases for tax deductions. In the occasional instance that a qualifying purchase is rejected, another form of payment must be used (a check or payment from another account and a claim for reimbursement later). In the more likely case that non-qualifying items are accepted, the consumer is technically still responsible, and the discrepancy could be revealed during an audit. A small but growing segment of the debit card business in the U.S. involves access to tax-favored spending accounts such as FSAs, HRAs, and HSAs. Most of these debit cards are for medical expenses, though a few are also issued for dependent care and transportation expenses.

Traditionally, FSAs (the oldest of these accounts) were accessed only through claims for reimbursement after incurring, and often paying, an out-of-pocket expense; this often happens after the funds have already been deducted from the employee's paycheck. (FSAs are usually funded by payroll deduction.)  The only method permitted by the [[Internal Revenue Service]] (IRS) to avoid this "double-dipping" for medical FSAs and HRAs is through accurate and auditable reporting on the tax return. Statements on the debit card that say "for medical uses only" are invalid for several reasons: (1) The merchant and issuing banks have no way of quickly determining whether the entire purchase qualifies for the customer's type of tax benefit; (2) the customer also has no quick way of knowing; often has mixed purchases by necessity or convenience; and can easily make mistakes; (3) extra contractual clauses between the customer and issuing bank would cross-over into the payment processing standards, creating additional confusion (for example if a customer was penalized for accidentally purchasing a non-qualifying item, it would undercut the potential savings advantages of the account). Therefore, using the card exclusively for qualifying purchases may be convenient for the customer, but it has nothing to do with how the card can actually be used. If the bank rejects a transaction, for instance, because it is not at a recognized drug store, then it would be causing harm and confusion to the cardholder. In the United States, not all medical service or supply stores are capable of providing the correct information so an FSA debit card issuer can honor every transaction-if rejected or documentation is not deemed enough to satisfy regulations, cardholders may have to send in forms manually.

One difference between FSAs and HSAs is the matter of yearend and rollovers: FSAs began as per calendar year, although by 2013 rollovers were introduced.<ref name=FSAvsHSA_rollovers/>