Credit Card Rewards and Statement Credits

If you're the proud recipient of a hard-earned cash back reward or a statement credit, you may be wondering how to categorize it. 

It's an inflow, so we'll default to categorizing it that way by choosing Inflow: To be Budgeted.

A $75 transaction with a payee of Capital One, category of Inflow To be budgeted, and a memo that says cash back.

Since it's an inflow to a credit card account, though, you won't see To be Budgeted increase—unless it created a positive balance on the card. It simply reduces the balance owed on that card. This accurately reflects what happened in your account: the credit is applied, and now you owe less money.

If you're working to pay down debt, you're that much closer now!

But what if you had already budgeted for the entire balance on the card? Let's say you owed $475 before receiving a cash back reward for $75—and you already had the full $475 set aside in your Credit Card Payment category. Now you only owe $400.

The credit card balance along the left shows $400, but the Credit Card Payment category in the budget has $475.

You have $75 you can move to other categories of your choice.

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