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Credit cards: Liabilities/Expenses 1
- Thread starter alleyCat
- Start date
It is similar to loan transactions actually: How to input loan transactions
I checked 'How to input loan transactions' and I don't see how that answers my question.
In my understanding, transactions originating in CC (to be paid at the end of the month, no interest charged) should appear 'neutral' . The monthly statement sent by the credit card company would include that transaction in its total, that would be an Expense.
But at present both entries show a red dot, label 'expense'!
I explained above how I set up the accounts.
I'm still puzzled.
???
In my understanding, transactions originating in CC (to be paid at the end of the month, no interest charged) should appear 'neutral' . The monthly statement sent by the credit card company would include that transaction in its total, that would be an Expense.
But at present both entries show a red dot, label 'expense'!
I explained above how I set up the accounts.
I'm still puzzled.
???
I use two Credit cards, both Mastercard (MCAB & MCHGr) but attached to different banks. Both are paid fully at the end of each month, meaning I use them as I would a check. They are set up as Type : Liability / Category : credit card. They appear with a yellow dot in the Accounts listing. One Bank is Checking, the other Savings Acc. though both function as a checking accounts.
1. I enter the amount charged to the credit card as follows:
Transaction Type : card payment or transfer or direct billing;
Origin Account : the Credit card
Target Account : category of expense involved
2. When the monthly statement arrives, I enter as follows:
Transaction Type : transfer or direct billing
Origin Account : the Bank
Target Account : the Credit card
I would expect 1. to be a neutral transaction and 2. an expense.
They both register as Expense (red dots), therefore falsifying the end result: an overdraft when there is none.
1. I enter the amount charged to the credit card as follows:
Transaction Type : card payment or transfer or direct billing;
Origin Account : the Credit card
Target Account : category of expense involved
2. When the monthly statement arrives, I enter as follows:
Transaction Type : transfer or direct billing
Origin Account : the Bank
Target Account : the Credit card
I would expect 1. to be a neutral transaction and 2. an expense.
They both register as Expense (red dots), therefore falsifying the end result: an overdraft when there is none.
What you are doing is correct. The transactions both appear with a red ball because they are both moving money out of your bank account or your card credit. First you pay something with a credit card and then you refund the credit card. Colors have nothing to do with final results actually. You should end with a balance of 0 on your credit card. It is explained here: Managing Credit cards.