Categorizing my credit card monthly payment

Storner

When I pay my credit card bill each month via Quicken, I lose my way as to where I should categorize the expense of the monthly payment in my checking account register within Quicken.

Is there a rule of thumb on this issue such that I can write the rule on an index card and place it beside my keyboard to refer to on those occasions?

Yes, I know to and do categorize the expense of each individual credit card transaction to an existing (or new) expense category, i.e., home repairs, lawn mowing services, wardrobe, charitable contribution and so on. But it’s the final payment to the card company that makes me confused.

Help, please. Thanks.

Chris_QPW

It should be recorded as a transfer from the checking account to the savings account.
Say you are in the checking account and the name of your credit card account name is "Credit Card" then the category field in the checking account transaction should be [Credit Card].

You can also set this up as a reminder.

Sherlock

Generally, a credit card payment is entered as a transfer from the payment account to the credit card account.  In Quicken for Windows, the category in a transfer entry identifies the other register.

Frankx

Just to expand on the answers above a little -

You said that you are categorizing the various credit card transactions to various categories (probably mostly expense categories and asset accounts) so the payment you make (usually on a monthly basis) is basically the total of all of those things that you bought and have already classified in Quicken.  All the credit card transactions during the month were also posted to the credit card "balance sheet" account in Quicken which built up a balance (this is referred to as "double entry bookkeeping".  So when you make the payment from your checking, or savings bank account, the other half of that transaction goes to the credit card "liability account" and it reduces the account balance by the amount you paid.

Hope this helps but feel free to ask followups.

Frankx

volvogirl

I read your question again.  I didn't see if you actually said where you are entering each charge to an expense category.  Do you have an Account set up for each credit card?  And you enter the purchases into them?

Just in case you are doing it the wrong way,

The proper way is to set up a credit card ACCOUNT and enter the charges into it when the purchase is made and assigning it to a category. Then when you pay the bill you TRANSFER the payment from your checking account to the credit card account. Then when you download the payment from the bank you match it to the one you already entered.

When you enter the payment in your checking account you put the credit card account name in for the category using square brackets around the name to indicate it is a transfer...like this… [credit card] or newer versions have a Transfer column.