Author Topic: How to handle Credit Cards ?  (Read 616 times)

Offline keyboard

How to handle Credit Cards ?
« on: January 31, 2018, 01:58:37 PM »
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
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Online asromzek

Re: How to handle Credit Cards ?
« Reply #1 on: January 31, 2018, 04:10:34 PM »
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.
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Offline keyboard

Re: How to handle Credit Cards ?
« Reply #2 on: January 31, 2018, 04:54:00 PM »
Thanks.... Appreciate it   
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Re: How to handle Credit Cards ?
« Reply #3 on: January 31, 2018, 04:56:24 PM »
Does that all make sense? I'm on the tag end of a coffee/caffeine binge... :parrot:
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Offline keyboard

Re: How to handle Credit Cards ?
« Reply #4 on: January 31, 2018, 05:10:15 PM »
I am still struggling to find the "Purpose" of the "Pre-financier debt" category ? 
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Re: How to handle Credit Cards ?
« Reply #5 on: February 01, 2018, 07:56:20 AM »
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, thereís a different approach to handling payments if itís 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.
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Offline Joel

Re: How to handle Credit Cards ?
« Reply #6 on: February 01, 2018, 08:07:30 AM »
Prefinancier debt is for the portion of your starting credit card balance you canít 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 canít, keep budgeting to the category until it reaches zero.
« Last Edit: February 01, 2018, 10:47:47 PM by Joel »
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Re: How to handle Credit Cards ?
« Reply #7 on: February 01, 2018, 08:41:58 AM »
Precfinsncier dent

One cocktail too many this morning?  ;D
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Online asromzek

Re: How to handle Credit Cards ?
« Reply #8 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.
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Offline keyboard

Re: How to handle Credit Cards ?
« Reply #9 on: February 01, 2018, 10:39:51 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 ....
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Offline Billy_McSkintos

Re: How to handle Credit Cards ?
« Reply #10 on: February 01, 2018, 12:52:18 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.
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Offline keyboard

Re: How to handle Credit Cards ?
« Reply #11 on: February 01, 2018, 01:01:29 PM »
Thanks Billy
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Offline Billy_McSkintos

Re: How to handle Credit Cards ?
« Reply #12 on: February 01, 2018, 01:11:46 PM »
You're welcome. Did that answer your question?
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Offline keyboard

Re: How to handle Credit Cards ?
« Reply #13 on: February 01, 2018, 02:19:15 PM »
Ya I think so..... I hate this growing old !!!!!
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Offline Rhuarc

Re: How to handle Credit Cards ?
« Reply #14 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