Question regarding Credit Card entries and reports

System Member admin
edited July 8 in Reports (Windows)

This discussion was created from comments split from:

I do not understand how Quicken handles Credit Card Transactions



  • DinoMan
    DinoMan Member

    I have a question regarding the CC entries and reports. Why does the CC show up under Bills and Utilities on the spending report? e.g., i use my CC to buy groceries, the spending report shows the grocery expense, but also shows the CC expense for the month; seemingly doubling the reported spending. What am I not understanding?

  • NotACPA
    NotACPA SuperUser ✭✭✭✭✭

    Are you recording those card txn in a Card account in Q? How are you recording the payment of the CC bill?

    The proper method is to record card txn into that card account, and then record the payment as a Transfer from your bank acct to the card acct.

    The payment is, itself, not an expense. The card purchases are the expense. An expense reduces your net worth. The payment reduces your bank acct but it also reduces your liability (the card account), so those 2 result in no change in your net worth.

    Q user since February, 1990. DOS Version 4
    Now running Quicken Windows Subscription, Business & Personal
    Retired "Certified Information Systems Auditor" & Bank Audit VP

  • Jim_Harman
    Jim_Harman SuperUser ✭✭✭✭✭
    edited July 9

    Quicken has a default expense Category called Credit Card Payment.

    This is confusing because the correct often a better way to handle credit cards is to set up an account for each card and record and categorize your purchases there. When you pay all or a portion of the card balance, you should record a transfer from your checking account to the credit card account. With a transfer, the the Category will be the other account in [square brackets].

    When you set up a spending report, click on the gear at the top right of the report to customize it. Make sure both the checking account and your credit card accounts are included in the report. On the Advanced customization tab, make sure "Exclude internal" is selected nest to Transfers. With this setting, the report will include the credit card purchases but will not include the transfers between your checking account and the credit card account.

    QWin Premier subscription
  • Tom Young
    Tom Young SuperUser ✭✭✭✭✭

    A user of Quicken gets to decide entirely on their own what's the "correct" accounting for them. Many people simply use Quicken as an electronic checkbook and not much more.

    With that mind-set the payment of the monthly credit card bill become an "expense" and is recorded in the checkbook as such and that Category of "Credit Card Payment" is designed for users who want to go that route.

    Until you understand that the word "Category" is Quicken's way of referring to "income" or "expense" as opposed to "Transfer" which refers to movement of money between "Accounts", it's an easy mistake to make to use that Category for your payment, ending up with double accounting.