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A
Anonymous
November 14, 2017
Solved

Categorizing Credit Card Payments

  • November 14, 2017
  • 29 replies
  • 107 views

I have 2 credit cards. 1 for exclusively for Work, and 1 that is for mostly work but sometimes has larger personal things on it too. 

I pay off the Work card in installments each month, I am no longer using it to purchase anything, just paying off the balance.

The Mostly Work card I pay off in full each month. 

My question is: How should I be categorizing these payments in the Banking Section of my Quickbooks Online? 

    Best answer by qbteachmt

    Credit Card balances are Debt. The Balance you owe gets increased by entering Expense charges that you used that card for, already. The credit card purchases are individually entered, for the date you used that card to buy something. That is how your balance owed Increases.

     

    The balance goes down by the payments you make. A payment against a Card Balance is paying against that credit card type of liability account in your file, the same as ane debt payment is not expense but Liability payment.

     

    In other words, paying VISA or AMEX is a debt payment, it isn't the purchase of something. You didn't buy anything from them. They are Lender = the card provider for micro-loans.

    29 replies

    qbteachmt
    qbteachmtAnswer
    Level 11
    November 15, 2017

    Credit Card balances are Debt. The Balance you owe gets increased by entering Expense charges that you used that card for, already. The credit card purchases are individually entered, for the date you used that card to buy something. That is how your balance owed Increases.

     

    The balance goes down by the payments you make. A payment against a Card Balance is paying against that credit card type of liability account in your file, the same as ane debt payment is not expense but Liability payment.

     

    In other words, paying VISA or AMEX is a debt payment, it isn't the purchase of something. You didn't buy anything from them. They are Lender = the card provider for micro-loans.

    A
    Anonymous
    November 15, 2017

    That is a great, in depth, and helpful reply, thank you! 

    So in Quickbooks Online, should I just link my credit card through Banking and enter each expense? Or should I just enter the total payment to the credit card as a debt payment? Or do I do both? 

    K
    KhimG
    Level 7
    April 12, 2019

    I'm still lost. So I have my bank account. I also have my credit card. Quick books pulls my Credit card balance from the website and I imports the "transactions". However, when I add these Transactions and start coding to them to the correct account on the Banking screen for review, they make the "QUICKBOOKS" total go up. So therefore the actual credit  card balance, and the quick-book balance doesn't match. How do I keep these transactions added to the correct accounts like "Cost of Goods" sold, without making the balance go up? 


    Hello there, @571548.


    I’m here to help categorize the transactions and make sure that QuickBooks balance matches with what’s on the credit card website.


    Before we begin, may I ask if the credit card is connected to QuickBooks? If so, importing the same transactions you've already downloaded causes the balance in the account to go up.


    Choose which method suits your business best. Either you download the transactions directly within QBO and edit the category to COGS or import and add them to the register with the correct account. Performing both processes at the same time can cause duplicates and incorrect balances.


    You can also match the downloaded or existing to the imported transactions to maintain the correct credit card balance. I recommend checking out the following articles for more information: 

    That should answer your concern for today.

     

    Post again in the Community if you have any follow-up questions, I’m always here to help. Have a good one!

    K
    karlanllc-gmail-
    August 13, 2022

    My business has changed banking institutions and need to change account that credit card payments get deposited to.

    L
    LeizylMQuickBooks Team
    QuickBooks Team
    August 13, 2022

    Good day, karlanllc-gmail-. 

     

    I've got you're back to help you change the payment account in QuickBooks Online (QBO). Here's how:

     

    1. Click the Gear icon.
    2. Select All Lists.
    3. On the Lists page, select Payment Methods.
    4. Click New on the Payment Methods page.
    5. Enter a name for the new payment method.
    6. Put a checkmark in the This is a credit card box.
    7. Click Save.

     

    I'm adding this article for more guidance: Add or modify the accepted credit card types in QuickBooks.

     

    You might also want to review all your sales and purchase transactions in the future. You can check out these articles for the detailed steps and information:

     

     

    That should do it! Fill me in if you have other questions about changing your payment account in QBO. I’m always here to help. Stay safe and have a good one.

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