Handling credit card payments that include a finance charge

LLoop
LLoop Member
I have two accounts at the same institution: a checking account and a credit card account. When I make a manual payment to the CC account from the checking account it may contain a finance charge. This is included in the amount paid to the CC account but it doesn't affect the CC account balance at my bank. However Quicken takes the whole payment, including the finance charge, to calculate my CC balance. There is no CC transaction that shows the finance charge.

What's the best way to handle this in Quicken to keep the records straight? Do I need to split the transaction at the CC account? If so, how do I do this?

Thanks for any help ...
Larry

Best Answer

  • Boatnmaniac
    Boatnmaniac SuperUser ✭✭✭✭✭
    Answer ✓
    @LLoop - I'm curious as to which credit card you have.  In all my years I don't think I've ever had a credit card where the interest charge was not entered by the financial institution as a debit transaction in my online credit card account and monthly statements.  Your credit card does not do this?
    You might want to consider entering the interest charge as a debit transaction in your credit card account on the date of your bank statement causing the amount of debt owed to be increased by the amount of that interest charge.  Then when you enter your transfer from checking to the credit card you do not need to set it up with split categories....the entire transferred amount will be applied to the credit card balance which already includes the interest charge.  This is how every credit card I have ever worked with manages the process.
    (QW Premier Subscription: R44.20 on Windows 11)

Answers

  • You would need to split the transaction into two transactions.  The CC payment and a fee.  The fee transaction category would be "service fee" or something like that, or whatever you use.  The total transaction then would match what is being put through.
  • LLoop
    LLoop Member
    So I did the split but the transaction total is still the same and Quicken uses this to change the balance. Am I doing it right?
  • What you should see is the total payment (that is split and includes the fee)  out of your checking account as a CC payment.  In the receiving CC account, you should just see the amount for the CC payment.  The fee being charged does not get transferred as a payment.  It should be categorized as a fee payment in the split in the checking account.
  • Boatnmaniac
    Boatnmaniac SuperUser ✭✭✭✭✭
    Answer ✓
    @LLoop - I'm curious as to which credit card you have.  In all my years I don't think I've ever had a credit card where the interest charge was not entered by the financial institution as a debit transaction in my online credit card account and monthly statements.  Your credit card does not do this?
    You might want to consider entering the interest charge as a debit transaction in your credit card account on the date of your bank statement causing the amount of debt owed to be increased by the amount of that interest charge.  Then when you enter your transfer from checking to the credit card you do not need to set it up with split categories....the entire transferred amount will be applied to the credit card balance which already includes the interest charge.  This is how every credit card I have ever worked with manages the process.
    (QW Premier Subscription: R44.20 on Windows 11)
  • @boatnmaniac - it could be a processing fee for the manual payment?  I haven't seen it myself either, but it could be a possibility.  
  • LLoop
    LLoop Member
    Ok, that worked.
    Thanks
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