Why label credit card payments as transfers?

In Monarch, we have a "Transfer" category and a "Credit Card Payment" category. Depending on your situation you might use one, the other, or both.

It's important to understand that Transfer transactions are ignored from your Budget and Cash Flow while Credit Card Payment transactions are counted as Expenses in your Budget and Cash Flow.

Using the Transfer category works well when both of your accounts are connected to Monarch. For example, if you have your credit card and your checking account connected to Monarch. When you pay the credit card bill out of your checking account, you'll see two transactions in Monarch in each of those accounts. If they are categorized as "Transfers" they will cancel each other out.

This assumes all the individual charges on your credit card are already in Monarch as expenses and you don't want to double count them.

We are shown two ends of a credit card payment on the transaction screen, with both transactions labeled as Transfers

The Credit Card Payment category works best when the credit card isn't connected to Monarch and you want to track the entire payment from your checking account as an expense since the individual charges are not already in Monarch.

Learn more about our transaction categories and transaction rules.

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