How to Deal with Credit Cards 101

ljpainter

Hello. I have no accounting skills. How do I deal with credit cards? I know they are an account. The bank transaction where I paid the bill I think is a category = transfer to the card account. The transactions from the credit card for purchases are categorized to what they are = groceries, etc. but what do I do with the transactions from the credit card fee showing the payment from the bank was applied? Am I missing any other entry to balance it all out?

chitownhockey

Customize your credit card and checking register to add the Transfer column in both.

You're correct in that you add or download your credit card transactions in the credit card register.

And then when you pay your monthly credit card bill, go to the checking account register and in the Transfer column select the credit card name from the drop down box.  Account names appear at the bottom of the list.

Quicken will automatically put the corresponding transfer in the credit card account register.  

Done.  

volvogirl

Yes when you pay the credit card bill from checking it is a transfer to the credit card account.  So your credit card balance will go down.  

Not sure what you mean...showing the payment was applied.  Do you have extra fees and interest added on the credit card bill?  You would need to enter those into the credit card account.  

Are you downloading transactions or manually entering them?

chitownhockey

Customize your credit card and checking register to add the Transfer column in both.

You're correct in that you add or download your credit card transactions in the credit card register.

And then when you pay your monthly credit card bill, go to the checking account register and in the Transfer column select the credit card name from the drop down box.  Account names appear at the bottom of the list.

Quicken will automatically put the corresponding transfer in the credit card account register.  

Done.  

volvogirl

Yes when you pay the credit card bill from checking it is a transfer to the credit card account.  So your credit card balance will go down.  

Not sure what you mean...showing the payment was applied.  Do you have extra fees and interest added on the credit card bill?  You would need to enter those into the credit card account.  

Are you downloading transactions or manually entering them?

NotACPA

"but what do I do with the transactions from the credit card fee showing the payment from the bank was applied? "

I'm not sure that I understand that statement.  There will be, in most instances, transactions that you created AFTER the card statement was cut.

SO, your payment to the card account(s) will reduce (move closer to $0) the amount of the account ... but there will still (probably) be a balance in the account.

ljpainter

Thanks everyone I have most of this. Final part that I didn't communicate well above. The credit card transactions come as two parts, payments/credits received and purchases made. The purchases and interest are the expenses. It's the payments/credits that I don't know what to do with. Is that a transfer and if so to what?

volvogirl

Well the payment would already be in your checking account from when you paid the last bill.  Any Credits and refunds you will need to enter into the credit card account.  If you have all the charges entered etc,  then the credit card account should match the statement on the closing date.  You don't have to enter the payments.  Those come as a Transfer from your checking account when you pay the bill.