Paying Credit Card with Checking & "Transfers"
I discovered Quicken automatically creating a LINK between a payment from my checking account to my credit card account. Apparently there's a setting in Preferences that is on by default.
So in my checking register it would show the category as [CREDITCARD] and in my credit card register it would show the category as [CHECKING]
It's kinda weird, if I remove the [CHECKING] from the category in the credit card register, the transaction in my checking register would actually disappear! Ugh!
When generating a spending report, these "Transfers" don't appear since they're net each other out.
I like to categorize my credit card payments to a credit card payment category so I can report on how much is being spent towards cards.
Am I wrong for this approach? Is the best practice to let the Transfer between accounts occur and watch the overall net worth vs. trying to show how much is spent each month?
Best Answer
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"ideally it should show transfers for the range as well, but does not…a bug perhaps?"
No, not a bug.
That "See where your money goes" item is focused exclusively on EXPENSES as accountants use that term and paying down your credit card bills simply isn't an "expense." I know "it feels like an expense" to you, but it isn't. That particular dashboard item should more correctly be named something like"Your Expenses for the Period" or something similar, because the word "money", to most people, means "cash" and that item isn't focusing on "cash" it's focusing on your "spending"more broadly defined.
When you use a credit card to buy gasoline, for example, that purchase IS and expense and IS included in the "See where your money goes" graph, but cash hasn't moved. Instead, your liability to the credit card company is increased. Cash isn't involved here at all, until you pay your credit card bill, and that action is what Quicken calls a "Transfer", a movement between balance sheet Accounts.
If you want a clearer picture of cash in and cash out you do have to include certain Transfers as line items in certain reports. You could start with the Banking > Cash Flow* report and customize it to show real cash movement. Here's a report that shows all pay payments to my credit cards in November:
*Another misnamed report because it's not really focusing on "cash" as much as focusing on "expenses."
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Answers
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Hi garyldougherty,
"So in my checking register it would show the category as [CREDITCARD] and in my credit card register it would show the category as [CHECKING]" sounds like a normal operation And yes, if you delete one, the other goes away as well. There are a number of default spending report options that should allow you to see the information you are looking for. If I understand your concern correctly, it seems that the Income and Expense by Category should provide you with the information you are looking for.
If you are looking to achieve something else, please provide more specific information as to what you are trying to achieve.
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Yes that's the way Transfers work. They are linked. Are you entering the charges directly into the Credit Card Account? You can include or exclude transfers from reports by customizing the report.
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 credit card bill you TRANSFER the payment from your checking account to the credit card account (not a category). Then if or 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 Mac versions have a separate Transfer column.
I'm staying on Quicken 2013 Premier for Windows.
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Thanks for the responses.
I understand these won't show in the Monthly Spending graph or details that appears by default in Quicken, specifically in the HOME and SPENDING tabs where it shows Monthly Spending (Last 30 days). I understand that's how it works, but it's just weird to me these don't appear in any dashboards or reports (including the Income and Expense by Category.
Yes, they net each other out; but it not being visible you lose sight of the Expense (payment to credit card) and "Income" (Payment received into credit card account)Should they being showing up as TRANSFERS in Monthly dashboard or reports, because they current are not.
I thought about making a category for Payment to Credit Card in checking. Then making a category for Payment Received (Income) into Credit Card account just so this information would appear. Yes, they'd net each other out, but at least you have visibility to it!
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I took at look at the graph on my dashboard, it's called "See Where Your Money Goes" and defaults to the Last 30 days.
No payments to Credit Cards (ie: Transfers) show up here, even including all Accounts (Checking and Credit Cards)Thus, no idea what you've paid out to credit cards…
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I am seeing on the Income/Expense report the FROM and TO amounts when I run report for a specific account.
It does not report correctly when trying to report all accounts at once, the FROM and TO go away.
Maybe I should just remove the "See Where Your Money Goes" from my dashboard, ideally it should show transfers for the range as well, but does not…a bug perhaps?
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"ideally it should show transfers for the range as well, but does not…a bug perhaps?"
No, not a bug.
That "See where your money goes" item is focused exclusively on EXPENSES as accountants use that term and paying down your credit card bills simply isn't an "expense." I know "it feels like an expense" to you, but it isn't. That particular dashboard item should more correctly be named something like"Your Expenses for the Period" or something similar, because the word "money", to most people, means "cash" and that item isn't focusing on "cash" it's focusing on your "spending"more broadly defined.
When you use a credit card to buy gasoline, for example, that purchase IS and expense and IS included in the "See where your money goes" graph, but cash hasn't moved. Instead, your liability to the credit card company is increased. Cash isn't involved here at all, until you pay your credit card bill, and that action is what Quicken calls a "Transfer", a movement between balance sheet Accounts.
If you want a clearer picture of cash in and cash out you do have to include certain Transfers as line items in certain reports. You could start with the Banking > Cash Flow* report and customize it to show real cash movement. Here's a report that shows all pay payments to my credit cards in November:
*Another misnamed report because it's not really focusing on "cash" as much as focusing on "expenses."
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Tom Young - That's very helpful! Thank-you! 😁
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Tim Young - Here's a question for ya…
When I make a payment to a credit card now from my Checking Account, I'm now assigning the [CREDIT CARD X] as the Category & these show up in my Cash Flow report since I'm showing all Transfers.
However, how does it work in relation to LOANS that are being tracked in Quicken as well?
I make the Payment from my Checking Account register, but the LOAN isn't available as a [CATEGORY]?Any idea why that is?
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@garyldougherty
Yes, it works with all Accounts in the file, or at least it should.
I can only make a guess here… Is the loan Account a "downloading" loan? If it is, that might be the problem since you, the user, have no access to the loan register in that case. That's only a guess since I have no way to actually test that.
As I understand it, in the case of a downloading loan the principal balance reduction actually doesn't come from the checking Account, it comes from the lender's download and that download "magically" reduces the loan's balances without affecting any other Category or Account in your file. To offset that bit of trickery the payment posted in the checking Account actually goes to a Category, something called Loan Payment:Principal. So I'd think the payment should be in expenses in two parts, one for interest, the other for principal.
I can't test any of this since I have never had a downloading loan.
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Yep, I am downloading loans & have been assigning payments to loans to Loan Payment!
So sounds like I'm doing correctly right now, the [CATEGORY] I previously learned from you regarding Credit Cards led me to believe a bit that Loans would work similar…but makes sense that I am downloading loans.
Thanks for your insight, appreciate it!
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