Pay credit card with points question
Hey guys
I was wondering how I would go about handling my credit card if i choose to use my reward points to pay off some of the owing.
We pay our credit card in full each month so I was thinking that the amount we pay with points would somehow end up back in our to be budgeted but I am not sure how to go about this.
Thank you in advance
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Enter the statement credit with the category Inflow: To Be Budgeted. This will reduce the balance on the card but it will not change the Available amount in your Credit Card Payment category (it doesn't automatically move from the CC payment category to To Be Budgeted, if that's what you are expecting to happen). However, since the Payment category will now have more than needed to pay the remaining balance of the card, you can move the excess to whatever other category/ies you like.
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This is, of course, assuming it's a paid-in-full card.
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The tricky way is to record a net $0 split transaction in checking: Split 1 categorized inflow as TBB, Split 2 outflow transfer to the CC. Automatically shows up in TBB. 😎
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dakinemaui I'm curious what benefit this method offers? Silly me, I just post the credit to the credit card and then negative budget the amount in the cc payment category to move to TBB. Since checking not involved, I prefer not to have a made up transaction in my checking account. Just curious if I'm missing a benefit to your method.
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Herman I assume it's because the points are paying "some" of the balance and dakinemaui is showing how you can to apply points and also pay the remaining balance from checking with one transaction.
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Herman The most significant advantage is the Budgeted header remains accurate. A fair number of users rely on that to gauge the split between this and next month funding.
Vibrant pointed out another consideration, coming down to how you view your "payment".
It's an atomic operation, which is nice -- too many users forget to adjust the Payment category. I suppose the budget looks "cleaner", which would appeal to some. Admittedly, I'm kind of reaching at this point.
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dakinemaui thanks, those are not important to me so i'll stick with what i'm doing :)
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dakinemaui we ended up just sending paychecks to next month and any other income gets dealt with in the current month. But then our paychecks are more than enough to cover budget needs, so credit card rewards, bank interest and birthday checks from Grandma are just immediately budgeted.
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dakinemaui said:
The most significant advantage is the Budgeted header remains accurate. A fair number of users rely on that to gauge the split between this and next month funding.Ah, I appreciate the clarification. I personally pay zero attention to that header except for the SFTF warning so that didn't even occur to me.
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I prefer to get my cash back as a direct deposit to my checking account so I don't have to do anything extra. Then it's just income.
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Superbone I do that as well for those that offer it. Several of my cards don't though. It is still pretty simple once you understand it.
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Superbone It's also "just income" if you run your paid-in-full CCs as checking accounts.
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dakinemaui True, which I do too, boo. You? (Sorry, I couldn't stop.) However, I have the Citi Double Cash which pays 1% for purchases and 1% for payment so I'd be costing myself by using points for payment versus getting cash back, Jack. (Dang it! I did it again!)
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Superbone That's smart, old f... umm... heart.
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