connecting a credit payment with transactions

Unknown
Unknown Member
I am importing my bank and credit card statements and want to use Quicken for expense planning and reconciliation. I tag all of my bank and credit card transactions to budget categories but what do I do about the payments from my bank to my credit card?  

I hope that I am missing a feature that allows one to connect that credit card payment to the credit card transactions because right now the payment is being categorized as "Bills & Utilities" which creates a big inaccuracy in my budget calculations.

Hypothetical Example:

Bank Statement
$50 Mortgage Payment
$2  Utility Payment
$5 Car Loan
$25 Credit Card Payment

Credit Card Statement
$10 Dinner
$15 Car Insurance

Yields:

Pie Chart Categories
Housing: $52
Car $20
Food $10
Credit Card Payments $25

If I let Quicken add that up my total spending is $107 when in reality its only $82.  I understand that the debits and credits will balance themselves out from an accounting perspective but how do I manage this from a budgeting perspective?

I suppose that I could delete the credit card payment and credit and just categorize the purchases but then I will lose the accounting capabilities of the system.  Basically I want to be able to split that $K Payment to the specific purchases that are getting paid off with the bank transfer.

Comments

  • NotACPA
    NotACPA SuperUser, Windows Beta Beta
    edited December 2018
    Record all of your card charges in a Credit Card Account that you create in Q.  One account for each card account (no matter if you have 1 card for the account, or more than one ... if it's one account in real life, it's one account in Q).

    Your payments to that account are TRANSFERS.  They neither increase nor decrease you wealth, thus they don't have categories.

    If you reflect that Card payment as a transfer from your checking account into the card account, it will appear as MINUS $25 in the card account (meaning that it will appear in the Payments column).  The use, in any account, of the "Amount" column rather than the "Payment/Deposit" columns for a checking/savings/cash type account and a "Charge/Payment" columns for a credit card is ill advised ... because it becomes confusing as to what's increasing the balance and what's decreasing it.

    That $25 card payment isn't spending.
    Q user since DOS version 5
    Now running Quicken Windows Subscription, Home & Business
    Retired "Certified Information Systems Auditor" & Bank Audit VP
  • Arctic Hare (H&B 2019 Canadian)
    Arctic Hare (H&B 2019 Canadian) SuperUser ✭✭✭✭
    edited May 2020

    Record all of your card charges in a Credit Card Account that you create in Q.  One account for each card account (no matter if you have 1 card for the account, or more than one ... if it's one account in real life, it's one account in Q).

    Your payments to that account are TRANSFERS.  They neither increase nor decrease you wealth, thus they don't have categories.

    If you reflect that Card payment as a transfer from your checking account into the card account, it will appear as MINUS $25 in the card account (meaning that it will appear in the Payments column).  The use, in any account, of the "Amount" column rather than the "Payment/Deposit" columns for a checking/savings/cash type account and a "Charge/Payment" columns for a credit card is ill advised ... because it becomes confusing as to what's increasing the balance and what's decreasing it.

    That $25 card payment isn't spending.

    @James: For whatever reason, this is a concept that many Quicken users have difficulty grasping. As explained by @NotACPA, payments from a bank account (e.g. chequing or savings) to a credit card should be affected in Quicken by using the Transfer transaction. This is best affected by going to the Quicken register for the account that will fund the payment (e.g. the Quicken Register for your chequing account) and then selecting Transfer from the Gear Icon menu in the top right of the register.

    If you choose to categorize the credit card payments in any other way than using the Transfer transaction it will cause problems. The Transfer transaction in Quicken is intended for this purpose. Affecting the transaction using any other method in Quicken will have undesirable consequences.

    Credit card payments aren't an expense. Credit card payments should not be a line item in a budget. Credit card payments do not belong on a spending report or net income report.
  • Unknown
    Unknown Member
    edited May 2020

    Record all of your card charges in a Credit Card Account that you create in Q.  One account for each card account (no matter if you have 1 card for the account, or more than one ... if it's one account in real life, it's one account in Q).

    Your payments to that account are TRANSFERS.  They neither increase nor decrease you wealth, thus they don't have categories.

    If you reflect that Card payment as a transfer from your checking account into the card account, it will appear as MINUS $25 in the card account (meaning that it will appear in the Payments column).  The use, in any account, of the "Amount" column rather than the "Payment/Deposit" columns for a checking/savings/cash type account and a "Charge/Payment" columns for a credit card is ill advised ... because it becomes confusing as to what's increasing the balance and what's decreasing it.

    That $25 card payment isn't spending.

    Thank you both for the responses.  To clarify, when you suggest "using the transfer transaction" do you mean linking bank accounts and doing a movement of actual money through Quicken, or are you describing depicting that movement through a "transfer".  Does Quicken only work efficiently if money moves through the platform?....not sure if I want quicken that deeply embedded in my financial life. 

    If its only the *depiction* of a transfer, do I create a new transaction manually and in the category field tag it as a transfer from checking to credit card?  Assuming I am auto downloading statements do I then delete the debit and credits that would have been registered?  

    @Quicken--If you are reading this, I think that you need to have a better set of instructions or some cleaner functionality given that "many quicken users have difficulty grasping" this concept.  
  • Arctic Hare (H&B 2019 Canadian)
    Arctic Hare (H&B 2019 Canadian) SuperUser ✭✭✭✭
    edited May 2020

    Record all of your card charges in a Credit Card Account that you create in Q.  One account for each card account (no matter if you have 1 card for the account, or more than one ... if it's one account in real life, it's one account in Q).

    Your payments to that account are TRANSFERS.  They neither increase nor decrease you wealth, thus they don't have categories.

    If you reflect that Card payment as a transfer from your checking account into the card account, it will appear as MINUS $25 in the card account (meaning that it will appear in the Payments column).  The use, in any account, of the "Amount" column rather than the "Payment/Deposit" columns for a checking/savings/cash type account and a "Charge/Payment" columns for a credit card is ill advised ... because it becomes confusing as to what's increasing the balance and what's decreasing it.

    That $25 card payment isn't spending.

    @James: the function/feature you want (i.e. need/must) use is described in this Quicken FAQ/help article:
    https://www.quicken.com/support/how-do-i-transfer-money-between-accounts

    Refer to the section for transferring funds between two non-investment accounts.

    It also, more specifically, explained (using a slightly different method) in the following FAQ/help article:
    https://www.quicken.com/support/how-do-i-make-credit-card-account-payment

    The second of the two linked articles addresses the differentiation between Quicken merely recording/reflecting the payment and using Quicken to affect the payment transaction. The second link addresses both of those scenarios.

    I am Canadian and the Canadian version of Q does not support bill payment; thus, I only use the manual recording/reflection functionality of Quicken.

    Here's what I do:
    1. Once I receive my periodic (monthly) credit card statement, I perform a reconciliation between Quicken's register and the (PDF) statement balance.
    2. After reconciling the PDF CC statement in Quicken, I create a Quicken transfer that reflects the payment I intend to make from Chequing account to my CC account.
    3. I log into my bank's website and schedule a payment from my chequing account to my CC account (which may be at the same financial institution or a different financial institution - I have both scenarios).
    4. Once the scheduled payment clears, One Step Update (using Express Web Connect, in my case) downloads both ends of the payment transaction (i.e. the money leaving the funding accounting and the money received by the CC account).
    5. Quicken automatically matches each end of the pair of downloaded transactions to one of the two halves of the previously entered transfer.
    The above process is generally regarded by SuperUsers as the best practice (use of Quicken Bill Pay aside) for making CC payments and recording such in Quicken. Note: there is a distinct advantage to manual entry of the Quicken transfer prior to downloading the two transactions that compose the payment.
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