Keeping up with your credit card transactions

FB Reminder: I am away on vacation right now. This post has been scheduled ahead of time.
I won’t be moderating comments until end of August 2009. Thanks for your patience!

This is something I’ve done ever since I received a shiny, plastic card in my hot little paws.

I know, I could be earning the extra $0.02 in interest or something.. but I’d rather just pay it now, be done with it and forget about having to remember what to pay at the end of the month, and extricate from what I owe from what I can leave until the next statement.

This was especially trying when I was charging like mad to card while travelling on business.

For example, if I charged $23, $50, and $100 in three separate transactions, I’d just pay $173 in total.

Seems easy right?

Wrong.

By paying the $173, I couldn’t figure out if it was ONE payment or 3 separate payments grouped into one! Stress ensued about whether or not I paid it off, or if the amount was correct..arrrgh!!!

So I came up with this solution.

This makes it SUPER easy to track each transaction that I have paid off and then I just don’t worry about it any longer, if I owe it, if I remembered to paid it.. whatever.

WHY THIS WORKS THE BEST FOR ME

It is seriously easy once you get the system in place (of course, you will need a way to track your expenses to make sure you’re recording what you’ve charged on your card, so you can pay it off).

1. It helps me reconcile my credit card statement

I just look at my super handy budgeting spreadsheet, look at what has left to be paid, and I just sort the transactions, and sum the total, which should match exactly with the statement.

It has never failed me!

Once, I even caught a $0.01 discrepancy, and realized that I had accidentally paid the wrong amount on a transaction and was just a penny off.

So I corrected that by sending a penny in right away so that I wouldn’t get charged with interest or something stupid.

2. Transactions are no longer grouped

I don’t pay them in groups any longer. If the amounts are $23, $50 and $100, I pay each of them separately so that I know that each of those amounts are cleared.

That way, if I get ANOTHER charge my accident for that amount, I know it’s a mistake, or at the very least, I look into the situation to see if I missed a receipt somewhere that I didn’t record, or if it may have been a mistake.

You gotta know where your money is going.

3. I double-check everything before I pay it

This also gives me a chance to check to see if they charged me the right amount. I caught a mistake once by a vendor who charged me $100 instead of $10.

Ugh, that was a mess.

But now I don’t just blindly pay off my entire credit card amount, the way I used to.

And it’s easy to see what has been cleared and what hasn’t just by looking at the actual amounts instead of the store name or date.

4. I don’t over or under pay any longer

This is especially helpful. In the past, I used to just pay $500 or whatever the amount I thought I had spent, or what it said at the bottom.

But then the number at the bottom wasn’t real-time accurate, and I wasn’t keeping track of each transaction being cleared, so I’d overpay, or under pay.. or whatever.

It was a hassle, because then if I underpaid, I had to figure out by how much, and if I overpaid, I had to figure it out from the next amount I charged to deduct that amount out.

I hate leaving money that could be in savings, even $10 locked on a credit card, when they don’t earn interest at all and I can’t take that money out and spend it somewhere in cash or on another card.

5. I am being diligent in preventing credit card fraud

Sometimes fraudsters will charge $0.02 or $10, very small amounts to check if you are paying attention. If you call and ask WTF that store or transaction is, it is a sign that you’re paying attention to what you are seeing on your statements, and they’ll move on to the next victim.

Of course, if you just don’t even look at your statements and toss them in the nearest skip, I can’t help you there.