I have created a CC account called "Visa" with a balance of $-125.00.
- I want to pay a payment of $50.00, how do I record this and where ?
- When the statement comes in, I want to record the interest, etc, then reconcile ?
Thanks for any help
Ron
Here's how I handle my a two primary accounts...
I keep my Checking and Credit Card accounts both on budget, and use my credit card exclusively for purchasing things. Income comes into the Checking account (bringing it more positive), expenditures come out of the Credit Card account (driving it negative), and credit card payments are simple transfers from Checking account to Credit Card account, which don't affect the overall budget.
This way, my budget is based on the sum of Checking (always positive) + Credit Card (almost always negative, unless paid off). In other words, if my Checking balance is $1000, and my Credit Card balance is -$100, then my budget is based on $900. Paying off the credit card in full brings Checking to $900 and Credit Card to $0 after the transfer is made, and the budget doesn't change at all. I always pay my credit card off in full every month which keeps things very simple (no interest).
It gets a little trickier if you don't pay off a credit card in full and incur interest charges. With the example above, if you only wanted to make a $50 payment instead of paying off the credit card in full, you would enter a transfer from Checking account to Credit Card account for the full payment amount of $50, bringing the Checking balance to $950, and Credit Card balance to -$50. The budget total is still $900. When you get your credit card statement and see that they charged you $5 in interest, you can add a new outflow transaction to your Credit Card account bringing the balance to -$55, Checking is still $950, and your overall budget total is now $895. You'll need to set up or choose a category, and budget some money into to cover the interest charge.
If someone has a better way to handle interest charges and payment, feel free to correct me.
Thanks.... Appreciate it
Does that all make sense? I'm on the tag end of a coffee/caffeine binge... :parrot:
I am still struggling to find the "Purpose" of the "Pre-financier debt" category ?
Ok, I forgot about that... I need to do a little more homework to explain the purpose of that category. I was using my scenario as an example, where my credit card is PIF (paid in full) every month.
When starting a new budget with a sizable amount of credit card debt, there’s a different approach to handling payments if it’s going to take a while to pay down the debt.
Once the debt is gone, you can fall back to the method I was describing.
Prefinancier debt is for the portion of your starting credit card balance you can’t pay down. If you can pay it in full, change the starting balance category to income and delete the pre financier debt category. If you can’t, keep budgeting to the category until it reaches zero.
Quote from: Joel on February 01, 2018, 08:07:30 AM
Precfinsncier dent
One cocktail too many this morning? ;D
A wiki entry with some screenshots and general instructions might be helpful. Maybe I can free up a few minutes to put something together this weekend.
Quote from: asromzek on February 01, 2018, 10:25:30 AM
A wiki entry with some screenshots and general instructions might be helpful. Maybe I can free up a few minutes to put something together this weekend.
That would be Awesome...... If you find the time to do this, please send me the url..... A BIG Canadian Bear Hug goes your way ....
Quote from: keyboard on January 31, 2018, 05:10:15 PM
I am still struggling to find the "Purpose" of the "Pre-financier debt" category ?
When you start financier you may have existing debt but financier doesn't know which category those transactions fall into. So, by default, it becomes Pre-financier debt. You just need to budget money to pay it off. All in one sitting or over time (as below - I couldn't figure out how to embed the images).
If you know what the expenditure was, you can re-assign the payee and category and then assign money to that category instead.
Any future expenditure will be tracked in your budget categories.
Thanks Billy
You're welcome. Did that answer your question?
Ya I think so..... I hate this growing old !!!!!
I'm creating a set of guides to using credit cards over on teh wiki site. You can check it out if you feel the need! Hope it helps!
https://docs.financier.io/index.php/Using_Credit_Cards
Quote from: Rhuarc on February 19, 2018, 02:38:53 PM
I'm creating a set of guides to using credit cards over on teh wiki site. You can check it out if you feel the need! Hope it helps!
https://docs.financier.io/index.php/Using_Credit_Cards
Love It !!!!!!! Looking forward to more ! Well thought out and explained.....Even an "Old Fart" like me , can fully understand it...Bravo, Bravo, Bravo.
Cannot wait for the next scenario...
Quote from: keyboard on February 19, 2018, 04:23:50 PM
Quote from: Rhuarc on February 19, 2018, 02:38:53 PM
I'm creating a set of guides to using credit cards over on teh wiki site. You can check it out if you feel the need! Hope it helps!
https://docs.financier.io/index.php/Using_Credit_Cards
Love It !!!!!!! Looking forward to more ! Well thought out and explained.....Even an "Old Fart" like me , can fully understand it...Bravo, Bravo, Bravo.
Cannot wait for the next scenario...
Glad to hear it makes sense! I'm planning on posting the 2nd set later tonight, and then hopefully the last round tomorrow.
I have just paid off all my Credit Cards and intend to use CC's as a "PIF" to take advantage of the "Cash Rewards"... I am really looking forward to your "Wiki" on doing this .....
Quote from: keyboard on February 20, 2018, 09:11:07 PM
I have just paid off all my Credit Cards and intend to use CC's as a "PIF" to take advantage of the "Cash Rewards"... I am really looking forward to your "Wiki" on doing this .....
Ok, I have added the following!
1 Intro
2 Scenarios
2.1 Making a Credit Card Payment
2.2 Charging to a Credit Card
2.3 Using a Credit Card and Paying in Full Monthly
2.4 Dealing with Credit Card Interest and Fees
https://docs.financier.io/index.php/Using_Credit_Cards
The only thing I need to add yet are a couple of screenshots dealing with Interest and Fees. If anyone has any feedback on what they like or what needs to be made clearer please feel free to comment over there in the discussion section, or here on the forums!
Absolutely Perfect !!!! A big Canadian Bear Hug goes your way.....
Great! I was hoping I would be able to get all of that across clearly! :-D