Q2008 Question

Google the archives ("quicken credit card payments split") on how to enter credit card transactions and a *single* credit card payment. If you think you should be entering every one of the transactions when you pay your credit card bill, you might not be understanding how to enter credit card payments.

One post from the past is (and I am quoting someone else here) "[*] I'm assuming you know that the "right" way to do this is create a credit card account and enter all your purchases in the credit card register; then a payment is a simple transfer from your checking account to the credit card account--one item! :) "

Why, IN THE NAME OF ALL THAT IS HOLY, do you insist on using split for that reason? Simply SET UP a separate credit card account and, as you use that credit card, enter the individual transactions as individual actions... using the appropriate classes, categories, etc.. Yes, it is JUST that simple. As long as you do the inputs every few days, it takes but a few minutes. I've been doing it that way since 1993.

Yes, that is PRECISELY the proper way to do it.

What I've always done is take my credit card statements when they arrive in the mail, and at that time categorize each transaction in Quicken. I separate any inadvertant business purchases put on a personal credit card, and I track my wife's spending vs. my own because we each pay for our own purchases.

This has only become a problem for me in the last year or so since more and more small merchants are accepting credit cards, e.g. McDonalds's, etc. I put everything I can on a credit card because it allows me to better see where the money is being spent, and I get cash back on most of my cards.

Using your method, would I not have to enter each credit card transaction in the Quicken credit card account(s) as they occur. If so, I prefer to do it all at once when my statement arrives. I also don't do downloads from my bank because years ago my checking account got hopelessly messed up with online downloads and I never could straignten it out. I eventually had to force a balancing transaction. Thanks again...

I can understand you separating out business expenses, for tax reasons, among others. However, WHAT is the point if separating out your wife's purchases? MOST people, when they get married, MERGE all their finances. I just do NOT understand this nitpicking about WHICH spouse spends money on whatever.

Likewise, whenever possible I use the credit card, for cash back purposes and to avoid having to have much cash on hand.

What's the big deal about entering them as they occur? When we get home, we put our credit card receipts into a basket. When I have the time, I enter them. When the bill comes, I do a RECONCILE. I don't do downloads from financial institutions because they cause more problems than they solve.

Not a big deal at all. For me, it's probably just a habit. So do you know if Q2008 allows for more than 30 line items?

(I'm commenting on selected pieces of your various POSTS since my original reply last night.)

Under the assumption we're talking about creating a CREDIT CARD Account, fine! So use CLASS when you enter the transactions. I also use class for some of my wife's spending vs. mine as well (like GROOMING/Wife, GROOMING/Hubby). Not that I make my wife 'pay', but I do like to see how much she spends for things vs. me!

OK - I see my CC in the company cafeteria too - just get a receipt to remind you to enter the transaction!

You don't HAVE to enter it each time, but it makes life easier if you do, and you don't end up with a huge 'to-do at the end of the month. One nice thing about entering as you go is that you have a running balance against your credit card which should give you additional insight as to your current expenses, rather than getting hit over the head at the end of the month.

I don't know for sure, but I doubt it. I've never had to use more than about 6 or so entries in any one particular split transaction, and that was on a club account (deposit) , not a personal account. I don't see a big need for them to increase that limitation. Of course, YMMV.

By the way, if you download your transactions, you don't have to allow Q to do anything more than your credit card (assuming your CC vendor gives your that capability), so you don't have to mess around with your checking account if you don't want to. With renaming rules, it makes the entries of the individual transactions even go that much faster, although since I usually do my entries ahead of time, that's not that big deal for me.

If I knew that answer, I wouldn't be able to say--as Q2008 hasn't been released here. It is irrelevant as the MOST number of split items I have ever used was about 7. That occurred when I was inputting my credit card entry of a supermarket bill: on the 1 bill were items falling into 7 different expense categories, e.g. groceries, toiletries, over the counter drugs, cleaning materials, etc..

Many of your conclusions regarding Quicken and credit cards mirror mine, Andrew. I have found Quicken to be a most excellent tool for allowing me to know at any instant: what my credit card balance is, to the penny, and what my net worth is, to the penny. Not to mention having total control over chequing account. Gone are the days when I never knew precisely how large a cheque I could write. Now, I know, to the penny, what is availale NOW, Quicken already having computed what all the preauthorized debits will require.

It's certainly my favorite application! And being anal, I do like knowing exactly these sorts of things. On the other hand, I realize that at any given moment, so transaction might be "in-flight", so I am not THAT concerned about exactness in terms of knowledge (although when it comes to balancing accounts I sure am!)

Apparently you want to enter in one single Quicken transaction all the individual transactions on your monthly credit card statement. If that is not correct, let us know.

If it is so, you are missing out being able to categorize your Quicken transaction so as to be able to track expenses in any detail. E.g. you buy several items at Home Depot, some items for capital improvements for your house and some others for general house cleaning. In that case you would enter a single split transaction matching the Home Depot transaction with part of the purchase categorized as Capital Improvements and the rest categorized as Home:supplies. With your method, my understanding is that the entire Home Depot purchase would be one entry with a single category in a split transaction.

Putting all your monthly credit card transactions in a single Quicken mega-transaction gives every credit card transaction the same date. Unless you and your wife use your credit card only one day a month, the Quicken transaction date would not match the credit card transaction dates.

Another thing you miss out on by entering your credit card statement mega-transaction directly from the statement (or downloading them is the ability to check (via Reconcile) that your credit card company billed you for only the transactions you or your wife actually made. If you trust your credit card company to make no errors, and no one else used your credit card number, then no problem. Otherwise, you should keep receipts of both purchases and returns and enter the individual transactions from your receipts without benefit of the statement. Then, when it arrives, reconcile the statement.

A great way to track who spends what via credit card is to open a second credit card account. You use one and your wife uses the other. My wife and I have separate credit cards accounts and separate bank accounts in our individual names. That works just fine.

To help answer your question, no, I don't know anything about the split transaction line limit in Quicken 2008.

Tom

That is correct. For example, I use an AMEX for clothing, dining, travel, entertainment, household items, and even groceries at times. When my bill arrives, I used to create a single transaction to pay AMEX via online bill pay with my bank, and I enter each charge on the statement using the split transaction feature which allows me to categorize each item and include a note about the purchase.

The problem is I use my credit cards more frequently now because they're accepted at more places, and I now exceed more than 30 purchases per billing cycle. Now I like being able to use a credit card for smaller purchases because it allows me to track purchases that I would have previously paid for using cash and then lost track of, but...if there are more than 30 purchases, I have to stop after 30 and create another transaction. I hope this makes sense.

I am able to do this using the split transaction feature as mentioned above.

E.g. you

This has never been a problem. Even for tax purposes, what matters is when the purchase was paid, not when it was made.

I scrutinize each purchase on my statement to ensure it is legitimate and challenge anything I don't recoznize. I don't however, check the exact amount of what I signed for vs what shows up in my statement. So I could lose out here due to fraud or error. If an amount looks suspicious, then I'll dig for the receipt.

I do this too, but sometimes things inadvertantly get charged to the wrong card and if so, I can categorize it correctly when entering the details into Quicken via the split transaction.

Thanks for your (and others) thoughtful responses. BTW, I'm going to set up an account for one of my credit cards to see if I like it better. I'll give an update at a later date. Regards...

Use a Credit card account and enter the transactions when they occur OR when the statement comes. Use the actual transaction date per the statement and enter them as individual transactions. You *could* use one transaction per day with the split option if you wanted to. Enter payments shown on your statement as Bank Transfer or Credit card payment account.

Then just post the payment to a credit card in your bank account to the same category you used to post the payments to. This account will always be zero assuming you remember to use the same category each time.

I don't think this is correct. I believe that for non-merchant credit cards (like Visa, Master Card, etc.) it's the date of purchase that counts. Because the merchant is paid by the credit card company almost immediately after your purchase, your purchase is effectively paid for when you make it and you no longer owe the mercant anything ... you just owe the credit card company.

R.C. White (and others) will be able to clear this up, if I've gotten it wrong.

[And one reason, I don't I don't remember reading in this thread, for not putting the credit card purchases in a payment account split transaction is that you lose the true payee field. You can put the payee name in the Memo field (using up some of its valuable space), but when you run payee reports, you won't get those credit card purchases shown with the correct payee. (It also makes Find/Replace for payees more difficult, or sometimes impossible)]

You are correct. The IRS considers credit card purchases the same as using cash. It is based on the date of purchase not the cc bill payment date.

Another excellent arugment for entering each transaction separately.

Hi, John (and Laura).

Right!

The real reason that the expenditure is considered paid by the taxpayer when charged to the credit card is that IS paid at that time.

The analogy is to a taxpayer who borrows cash from a bank and uses the cash to pay the merchant or other vendor. The buyer no longer owes the merchant anything. He owes the bank, not the vendor.

We had a lengthy thread here a few years ago contrasting this situation with a purchase from a merchant on credit. Remember the days when we had "charge accounts" at Sears, Ward, Penney's, and all the other stores in town? At the end of the month, we got a bill from the store and sent our check to the store. Not nowadays. Now, we don't send any money to the store. We send it to the bank or other credit card issuer.

On the cash basis, which includes virtually all US individual taxpayers, we could not deduct such credit purchases until we paid the store. But if we made our payment to the store before January 1, we could deduct it in the year of payment, even if we paid it with borrowed money.

These days, we all still have a few kinds of expenses that are owed directly to the vendor or provider, such as doctor bills and utilities. And we may still have an "open account" at the hardware store, especially if we live in a small town. Those bills can't be deducted until the year when we pay them (if they are deductible at all). But whether we earn the money, take it from savings, or borrow it doesn't matter.

Even credit cards with a store name on them (like The Home Depot) usually are issued by Citibank or some other third party lender. In the case of cards actually issued by a merchant, I'm not sure what the current ruling would be. But I doubt that's a problem for most of us.

On the accrual basis... Well, that's not really what we're talking about today and it applies to so few individual taxpayers, let's not get into it right now.

So, to the OP (Lanman?): I agree with the consensus. Create a Credit Card Account for each card. Record each expenditure as of the date it occurs (use a Split transaction as appropriate for an expenditure that falls into multiple categories), increasing the payable balance on the card. Add interest each month, if it is incurred. Record each payment as a reduction of the balance owed.

RC

The purchase was PAID for the second that the cashier swiped your credit card..NOT when you eventually paid your credit card bill, probably several weeks later.

Why get married? Marriage is a union of ALL aspects of you life, including the financial ones. If you can't or won't merge the financial aspects, you need to get counselling. More marital breakups are over money than ANYTHING else, even sex.

John, you are absolutely correct: the merchant is paid effect the second that the cashier swipes the credit card thorough the machine. Some idiots here think that ANYONE can be an accountant.

Precisely. It is idiotic to have the whole monthly bill as one transaction, then do splits.