How are categorizing credit card cash awards?

Question

On one credit card, the financial provider allows to pay your self back by adding a deposit back to your card account. On another, I have to either request a snail mail check or receive actual cash from a store. Currently I just show it as income as a credit card cash award. crediting the account that the amount will be deposited into.

Tom Young · Answer

I think the best approach is along the lines @Sherlock has suggested.  
I have an expense Category of "Credit Card Rebates" with sub-Categories identifying the credit cards: "Amazon VISA", "Sears MC", etc.As I utilize the rebates or if the cash back is actually "deposited" into the credit card account, the offset is to the appropriate Credit Card Rebate sub-Category expense. If there's any annual fee charged by the card that also goes into the appropriate Credit Card Rebate sub-Category.  
So I can easily tell if I'm "ahead" or "behind" with each card when I do my regular Spending reports.  If the numbers in the Credit Card Rebates section of the are red and negative, I'm ahead, if they're black and positive, I'm behind.

Sherlock · Answer

We enter the Reward transaction as a deposit in the account that receives the funds using the same payee we use to pay the credit card bill.  I understand the desire to view cash back as reducing the original purchases but that is not what is actually happening.   The cash back reward is a payment from the credit card company.  You may want to review: https://www.investopedia.com/ask/answers/110614/are-credit-card-rewards-considered-taxable-income-irs.asp

droz · Answer

Thanks. Trying to understand. How is the expense category 'Reward' associated with? I thought that if I associated with the credit card account that it impacted, to reduce those expenses I would split the transaction by a percentage of the categories that I charge to that account. A lot of work. I have a credit card fees category. The rewards would exceeds the debit. Kind of defeating the purpose of tracking the credit card costs. I'm wondering if my original idea of splitting the transaction of the purchased good expenses would be better. Showing that I'm my expenses for those items are less. Thanks