Maxprog | iCash FAQ - Managing Credit cards

If it is a real credit card you have to create it as a debt account. Let's see an example. Let's say you purchase some stuff with your card for $500.00. This card has been created with a starting balance of $0.00 and of type 'Debts'. This is the transaction:

Date

Origin Account

Target account

Amount

08/31/2003

My credit card

My stuff

500.00

After this transaction 'My credit card' has a new balance of -$500.00

Then let's say payment is made monthly like a loan with a 5% interest for a period of 12 months. The monthly transactions will look like this:

Date

Origin Account

Target account

Amount

08/31/2003

My checking account

My credit card

40.70

08/31/2003

My checking account

Financial expenses

2.13

'My credit card' balance becomes -500 + 40.70 = -$459.30
'Financial expenses' is an expense account we have created to compute interests.

And next month:

Date

Origin Account

Target account

Amount

09/31/2003

My checking account

My credit card

40.87

09/31/2003

My checking account

Financial expenses

1.96

'My credit card' balance becomes -459.30 + 40.87 = -$418.43

and so on until last month when 'My credit card' will have again a balance of $0.00, 'My Checking Account' will have been debited for $500.00 and 'Financial expenses' account will have a balance of $13.96. Note that the calculation has been made with our Loan Calculator (Loan Calc)

Of course if payment is made in one only transaction with no interest, the transaction will be far much simple:

Date

Origin Account

Target account

Amount

08/31/2003

My checking account

My credit card

500.00

You simply credit 'My credit card' and debit 'My checking account' for $500.00