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kjewelry
February 1, 2023
Question

Overdraft Line of Credit

  • February 1, 2023
  • 1 reply
  • 0 views

Hi there,


I opened up a checking account which doubles as a line of credit. If I overdraft on my checking account, the line of credit kicks in and I begin to incur interest on the overdraft amount. 

For example, say my checking account has $100 in it. I spend $200 to buy inventory, so now I have used $100 from the line of credit and will begin to incur interest on the $100 I borrowed. 

How do I go about setting my accounts? I am new to Quickbooks so I'm unsure about how I can track an account that is both a checking account and a line of credit. I can confirm that any overdraft amount is considered as a line of credit by my bank, not an overdraft. 

1 reply

T
Trish_T
February 1, 2023

Hi kjewelry,

 

Welcome to the QuickBooks family!  QuickBooks Online provides the features you need to set up and track your line of credit effortlessly.  I'd be happy to assist!

 

To get started, you'll need to set up two accounts.  One will be for tracking the principal and the other would be for tracking incurred interest.  When you use your line of credit to pay for items, you'll record the transaction as an expense or bill.  After setting up the accounts you can track the transactions associated with your line of credit.  Here's a helpful guide for your reference, to assist with setting up a line of credit in QuickBooks Online.

 

Should you require additional assistance, please don't hesitate to contact us.  With your consent, we can connect with you virtually and ensure you're able to accomplish your goals as soon as possible!

 

Schedule a Callback or start a Chat: click (?) Help in the upper right in QuickBooks Online > enter "Contact support" > hit Contact Us > provide a brief summary of your situation > hit Let's Talk > choose Get a callback or Start a Chat.
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Feel free to reach back out if any other questions come to mind.  We'd love to help!
 

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