How to categorize cash back in a credit card account?
I have a credit card that gives cash back on purchases. How do I categorize this transaction so that it doesn't look like a payment?
Hi Alice Blue Inspector !
If you're applying those cashback rewards to your credit card balance, you should categorize the transactions as Inflow: To be Budgeted.
When you do that, the inflow will only reduce the balance of the credit card. This accurately reflects what happens in your account as well. The credit is applied, and your account balance is reduced.
Once your account balance is reduced, be sure to double check the Credit Card Payment category for that particular account. You might find that you now have more money than you need in the Payment column. If you find this is the case, you can safely move money from that category to any other category.
Target Redcard. 5% off at the register. That's the one time I actually reduce my expenses using the credit card perk. And in this case it's accurate because it also affects the return value of the purchase.