I signed up for an FSA for dependent care from my employer. The company that manages the FSA has informed me that the only way I can use my funds is for me to pay upfront using a regular credit card, then seek reimbursement for the funds out of my FSA account. They won't pay the expense directly.
I'm confused as to how this provides a tax benefit to me. If I pay upfront using after-tax dollars, then get reimbursed using FSA pre-tax dollars, am I actually gaining anything? Wouldn't I need to be able to pay my qualified expenses directly from the FSA account in order to realize a tax benefit?
Maybe I'm confused (which seems to be the whole point of the FSA scheme, but I digress...); I'd appreciate clarification.