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Help with credit transaction on credit card affecting bank statement

Bizowner

I had a large credit applied to my credit card resulting in a positive balance on the credit card for several months even though I had some charges each month. How do I record the credit balance in Quicken without affecting my bank balance? I categorize the charges each month to keep up with the categories for my business.

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Tom Young

You enter it as a Payment and in the Category field you use the same expense or Account that you used for the original charge or charges. If the credit to the credit card Account is large enough to change the balance from "I owe the credit card company" to "the credit card company owes me", that's fine. It will sit on your balance sheet as a form of "receivable" in the credit card section of the Accounts. As you make future charges that "receivable" gets whittled down, eventually putting you back in the "I owe" position.

Bizowner

Tom, thank you for your answer, but I have a follow up question. Since I am paying the balance out of our bank account, how do I account for the credit without messing up my bank balance?

Chris_QPW

https://community.quicken.com/discussion/comment/20415311#Comment_20415311

Each month you pay the "negative balance". If you have a positive balance for the month, you will owe nothing for that month, and as such you will not have a payment that would affect your bank account.

splasher

If I read your original post correctly, when you make the payment in the checking account, you are making it a split with the details coming from your credit card statement.

What you really need to do is create an account in Quicken for the credit card and enter separate transactions for what you have been entering in the checking account split. I download those transactions from the credit card website and import them into the CC account. When you make a payment, it would be a transfer from checking to CC. In your current situation, the CC account would show the positive balance and not affect your checking account in any way.

One HUGE advantage to doing it this way is that you don't have to wait until you get the statement to enter the CC transactions, you could do them a few at a time (weekly). I used to do it your way a long time ago and having the CC account in Quicken is a much better way. Another advantage, each transaction has its own payee whereas your method has the same payee for every one of the split lines when doing reports.

Chris_QPW

Oh, if @splasher is right, then I see how you have a big problem trying record it the way you are.

Just as a negative balance in your credit card account doesn't affect your checking account until the payment is made, a positive amount doesn't affect the balance of your checking account until a payment is made. Without a second (credit card account) you have no way to record the fact that you have a positive balance in an account that isn't your checking account.

Let me put this another way, where did you record the negative balance in Quicken as it was going up while you were making charges? And the answer is nowhere. To continue the same way you were recording it as one payment with a split there wouldn't be anything different, the "positive balance" would be outside of Quicken.

Are you manually entering transactions in your register, or downloading them?

If you take @splasher 's advice and create a credit card account, will you be downloading transactions too it?

(Switching over might be a bit tricky depending on what you are going to do forward)

Tom Young

I did assume that you had a Quicken credit card Account to which you were making entries for purchases and payments.

If instead of doing that you've been analyzing your monthly credit card statement, determining how your purchases for the month should be distributed to the Categories, and then entering the payment to the credit card company as a split transaction, I'd say:

You're making a lot of work for yourself with "after the fact" analysis. If you simply entered the purchases as they occurred there's no need for any "analysis" of the statement. The program keeps track of how much you spend in each Category.
There's really no way of properly recording that large credit and resulting "I'm owed" balance without creating a separate Account for the credit card. Since the credit card company isn't giving you that "large credit" in cash money you simply have no place to put it.

Assuming you "saw the light" and realized that you needed a credit card Account in Quicken upon opening the statement that showed the refund, then the correct way of handling this would have been:

Create that credit card Account in Quicken with an "Opening Balance" of $0, posted on the same date as the ending date used on the previous credit card statement.
Enter the transactions on the new statement using the transaction dates and dollar amounts and whatever Category is appropriate for those transactions. The credits back would be coded as "Payments." This should establish the proper "the credit card company owes me" balance shown on the statement's ending date.
After that record your subsequent purchases as you make them, whittling down the balance you're owed. Eventually it will turn back into the "normal" situation with a credit card company: you owe them.

Bizowner

Thanks everyone! I solved the problem by setting up a separate cc acount in Quicken. Appreciate your help!