Credit Balance Received as Check

Crispy1

I received a credit balance as a check and am not sure how to handle the transactions. I did not set up a Credit Card account in Quicken… using categories within my checking account.

I made a few purchases and paid off the statement in full. I then returned a pair of jeans for $50 and the next statement had a credit balance. Since I don’t use the card that often, I requested that they send me a check for the $50. The next statement had the <$50> starting balance and a $50 transaction to indicate the balance being paid to me, netting to zero. A few weeks later, I received and deposited the check.

My question is on the last credit card statement… do I need to do anything with the credit card company's positive $50 transaction? If so, please let me know what to enter. Or can I ignore it and just enter the check deposit as an increase to the Cash category? The Clothing category gets reduced for the return and the deposit happens later, so the +$50 on the statement feels a little lopsided. I could definitely be overthinking this and am hoping this group can help! Thank you!

Jim_Harman

Normally it is better to set up an account for your credit card in Quicken and enter the charges there with appropriate Categories. Then when you pay all or a portion of the card balance, you would enter a transfer from your checking account to the credit card account.

But since you have chosen not to do that, you enter credit card payments as split Withdrawals from your checking account. In this case the payment included $50 for clothing.

Thus you should enter the check you received from the credit card company for the clothing return as a Deposit in your checking account with a negative $50 in the Clothing Category.

volvogirl

Yes enter the deposit to the clothing category. Then ignore it on your credit card statement. And here is my 2 cents on credit card entries…..

I used to do it the wrong way for years!  Then I wised up and now enter them properly. I would split my credit card payment into all the categories on one transaction in my checking account. And since I always pay more than the bill I would need to figure the difference and put it to another category.  But then I needed to have them entered on the date the charges actually happened. So I finally set up a credit card account. It makes it much easier to enter and balance!

Here's a list of some reasons why you should do it this way…..

You don't have to wait to make the payment and split it out

You won't run out of split lines (I used to use Q2004 and there was only 30)

You can use both the payee and memo fields for more description

You don't have to figure out the difference if you pay a different amount

Then your Credit Card Account will exactly match your statement

Charges get entered with the right date (better at year end for taxes)

You can enter all charges to date, not just what's on the bill - then you can see what you still owe

You won't forget what a charge was for if you enter it right away from the receipt

And if there are multiple categories purchased on a single credit card charge, you can split that one credit card charge to detail the items purchased each with their own category and memo/note.

Crispy1

Thank you both for the suggestions. I am getting caught up trying to reconcile the statement and the later check deposit. I will ignore the positive $50 transaction on the credit card statement… that will be the same as the check deposit. A little strange but I have spent way too much time on this. Thanks for the tips for using the credit card accounts in Quicken. Since this credit card isn’t used much, it was an easy one to play with the Credit Card accounts. I like it so far and will use it for my other credit cards as well. Thanks so much!

Jim_Harman

Another benefit of setting up credit card accounts in Quicken is that for most cards, you can download the transactions. Then even if you don't enter the transactions manually, you can record and categorize the charges and payments as transfers as they come in. This is much less effort and less error prone than setting up a giant split transaction each month for the payment.