Recording a credit card payment in QuickBooks

To record a credit card payment in QuickBooks, you write a check or enter a bank transfer from your checking account to your credit card account. The payment reduces what you owe on the card and moves money out of your bank. QuickBooks treats the credit card as a liability account—money you owe—so paying it down is the reverse of charging something to it.

The exact steps depend on whether you use QuickBooks Online or QuickBooks Desktop, and whether you pay by check, ACH transfer, or another method. In both versions, the core idea is the same: you're moving money from your bank account to settle the credit card balance.

Key Takeaways

  • A credit card payment in QuickBooks is recorded as a check or bank transfer from your checking account to your credit card liability account.
  • In QuickBooks Online, you write a check from your bank account and select the credit card account as the payee.
  • In QuickBooks Desktop, you use the Write Checks window and follow the same process: bank account out, credit card account in.
  • The payment should match the amount you actually sent to the credit card company, not the full balance if you only paid part of it.
  • If you pay by ACH or automatic transfer instead of check, record it as a bank transfer between accounts rather than a check.

Recording a credit card payment in QuickBooks Online

Open QuickBooks Online and go to + New (the button in the upper left). Select Check. In the Payee field, type the name of your credit card company or select it if it already exists in your chart of accounts. Set the Payment method to Check (or Electronic if you're recording an ACH transfer).

In the Payment account field, select the bank account the money is coming from—usually your checking account. Leave the date as today's date or the date you made the payment. In the Category details section at the bottom, select your credit card account from the dropdown. Enter the payment amount in the Amount column. Click Save and Close.

QuickBooks will reduce your credit card balance by that amount and reduce your bank account balance by the same amount. If you need to record a partial payment, enter only the amount you paid, not the full card balance.

Recording a credit card payment in QuickBooks Desktop

Open QuickBooks Desktop and go to Banking menu, then select Write Checks. The check-writing window opens. In the Pay to the Order of field, type your credit card company name. Set the date to the date you made the payment.

In the Bank Account dropdown at the top, make sure your checking account is selected. Scroll down to the Expenses tab (or Items tab if you use that view). In the Account column, select your credit card account. Enter the payment amount in the Amount column. Click Save & Close.

The payment is now recorded. Your checking account balance decreases and your credit card liability decreases by the same amount.

Recording an ACH or automatic transfer instead of a check

If you pay your credit card by ACH transfer or automatic bank transfer rather than by check, record it as a bank transfer instead. In QuickBooks Online, go to + New and select Transfer. Choose your checking account in the Transfer funds from field and your credit card account in the Transfer funds to field. Enter the amount and the date, then save.

In QuickBooks Desktop, go to Banking and select Transfer Funds. Select your checking account as the source and your credit card account as the destination. Enter the amount and date, then save. This method is cleaner than recording a check when you know the payment went through electronically.

Matching the payment to your credit card statement

After you record the payment, check your credit card statement to make sure the amount matches. If your credit card company shows a payment of $500 but you recorded $450 in QuickBooks, the difference will show up when you reconcile. Go back and correct the amount in QuickBooks to match what actually posted to your card.

Some credit card companies take a day or two to post payments, so the payment may not show on your statement immediately. Wait until it appears before worrying about a mismatch. Once it posts, your credit card balance in QuickBooks should match your statement balance minus any new charges made after the payment date.

What happens if you record the payment wrong

If you record a payment to the wrong account, your bank balance and credit card balance will both be off. To fix it, delete the incorrect transaction and create a new one with the correct accounts. If you've already reconciled your bank account, you may need to undo the reconciliation, fix the transaction, and reconcile again.

If you recorded the wrong amount, edit the transaction directly. In QuickBooks Online, find the check in your bank account register, click it, and change the amount. In QuickBooks Desktop, go to the check register for your bank account, find the payment, and edit it. Save the change and your balances will update.

Reconciling your credit card account after payment

Once your payment posts to your credit card statement, reconcile your credit card account in QuickBooks to make sure everything matches. In QuickBooks Online, go to Accounting, find your credit card account, and click Reconcile. In QuickBooks Desktop, go to Banking and select Reconcile, then choose your credit card account.

Check off the payment in the reconciliation window to match it against your statement. If the ending balance in QuickBooks matches your credit card statement, you're done. If it doesn't, look for charges or payments that are on your statement but not yet recorded in QuickBooks, or vice versa.

Frequently Asked Questions

Do I record a credit card payment as income or expense?

Neither. A credit card payment is a transfer of money from your bank account to your credit card account. It reduces a liability (what you owe), not income or expense. QuickBooks handles this automatically when you select the credit card account as the destination of the payment.

What if I pay only part of my credit card balance?

Record only the amount you actually paid, not the full balance. If you owe $2,000 but paid $500, enter $500 in QuickBooks. The remaining $1,500 stays as a balance on your credit card account until you pay it.

Can I record a credit card payment before the money actually leaves my bank?

Yes, but be careful. If you record it before the payment posts, your bank balance in QuickBooks will be lower than your actual bank balance for a few days. Most accountants record payments on the date they're sent, not the date they clear. Just make sure to reconcile once the payment actually posts.

What if my credit card company charged a fee on the payment?

Record the payment amount as the total you sent, including any fee. If the fee is separate from the payment itself, you can record it as a separate transaction to a bank fees or credit card fees expense account, depending on how your company tracks fees.

How do I know if I recorded the payment in the right account?

Check your credit card statement. The payment amount should appear there. Then look at your QuickBooks credit card account balance—it should be lower by the payment amount. If both match, you recorded it correctly.