A

Anonymous

Solved

Categorizing Credit Card Payments

Forum|Forum|8 years ago
November 14, 2017
29 replies
109 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.

qbteachmtAnswer

Level 11

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

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?

R

Ryan_M

Moderator

When I click the transfer, my credit card balance increases. What have I done wrong?

Hi @qkbks_newbie,

This happens when you choose your credit card account as the source of the payment, and your bank as the recipient. It should be the other way around.

You'll want to delete the previous transfer transaction you created to keep your books accurate.

Here's how:

Highlight the Accounting tab.
Select Chart of Accounts.
Search for your credit card account, and click on it.
On your credit card register page, locate the specific transfer you created earlier, and click it.
Tap the Delete button.

You can create a new transfer transaction at this point. Ensure that the Transfer Funds From drop-down menu has the bank account where the payment is coming from. The Transfer Funds To drop-down menu should be set to your credit card account. Refer to the screenshot below as an example of recording a credit card payment.

Other than creating a transfer transaction, you have other options on recording a credit card payment. Check out this article for additional details: Record credit card payments.

I'll be around in case you need further help. Leave a comment below, and I'll get back to you.

K

karlanllc-gmail-

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

L

LeizylM

QuickBooks Team

Good day, karlanllc-gmail-.

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

Click the Gear icon.
Select All Lists.
On the Lists page, select Payment Methods.
Click New on the Payment Methods page.
Enter a name for the new payment method.
Put a checkmark in the This is a credit card box.
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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