Record Credit Card Payment and Credit Card Rewards

rbtjdrbtjd Member Posts: 8

Hi, how do I record credit card payment that came out of my bank account to payoff the balance?
Also, how should I record any credit card rewards?

Thanks

Comments

  • MikegMikeg Member Posts: 292 ✭✭✭

    If the bank it came from is in Wave then, credit cash - debit the credit card liability. If it came from a personal bank account then, debit credit card liability and credit owners contribution. Rewards (credits on card) - The IRS treats these as a reduction of expense. You are only allowed to deduct an expense for what you actually paid for it. Since a "reward" paid for an expense it should reduce that expense.

  • rbtjdrbtjd Member Posts: 8

    @Mikeg said:
    If the bank it came from is in Wave then, credit cash - debit the credit card liability. If it came from a personal bank account then, debit credit card liability and credit owners contribution. Rewards (credits on card) - The IRS treats these as a reduction of expense. You are only allowed to deduct an expense for what you actually paid for it. Since a "reward" paid for an expense it should reduce that expense.

    Hi Thank you so much for your help.
    Just one question, when it shows up on my transaction section. Under Category what should I put it as?
    For Example

    Payment to Chase Credit Card $100 (From my bank account)
    Payment Received for Credit Card $100 (Paid to my Credit Card)

    what should I categorize each one as?

    Thank you!

    edited January 31, 2019
  • MikegMikeg Member Posts: 292 ✭✭✭

    Wave should recognize them as the same transaction when you do a transfer (from checking) to credit card. It should change the description for the one that is in green to transfer once you set the one from the checking account as a transfer. If not I always delete the payment received in the credit card that was imported. Hope that makes sense.

  • rbtjdrbtjd Member Posts: 8

    @Mikeg said:
    Wave should recognize them as the same transaction when you do a transfer (from checking) to credit card. It should change the description for the one that is in green to transfer once you set the one from the checking account as a transfer. If not I always delete the payment received in the credit card that was imported. Hope that makes sense.

    Hi Mike thank you for your help. Yes, it did change the description for both of the transactions. I am wondering how I should categorize them. I would not like to delete them if possible.

    Thank you,

  • MikegMikeg Member Posts: 292 ✭✭✭

    It categorizes them as transfers and they net to zero. No further action on your part with regards to the transfer between accounts. Hopefully, your accounts agree to the bank balances. You will need to classify the transactions that came through on the credit card on the Accounting/Transactions page to the appropriate expense.

  • rbtjdrbtjd Member Posts: 8

    @Mikeg said:
    It categorizes them as transfers and they net to zero. No further action on your part with regards to the transfer between accounts. Hopefully, your accounts agree to the bank balances. You will need to classify the transactions that came through on the credit card on the Accounting/Transactions page to the appropriate expense.

    Hi Mike,

    it does not categorize them as transfers that why I am asking you how I should categorize them as. So should I make a new account named transfer? or do I need to something else?

  • Katie_SilkinaKatie_Silkina Guest, Unconfirmed, Applicant, Member, Administrator, Moderator, Employers Posts: 73 admin

    hey @rbtjd take a look at the following article for help on settings up the transfer correctly.

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