Credit Card Balance and Limits

Understanding Credit Cards in NivoaFlow

Credit cards and lines of credit are classified as liability accounts in NivoaFlow. Their balance represents what you owe, and they subtract from your net worth.

Balance and What It Means

Your credit card balance shows the total amount owing. This includes posted transactions and may include pending charges depending on your bank's reporting.

• A positive balance means you owe money
• A zero balance means the card is fully paid off
• A negative balance (rare) means you have a credit on the account, usually from a refund or overpayment

Credit Limits

NivoaFlow tracks your credit limit when available from bank sync. This lets you see how much available credit you have at a glance.

Utilisation and Net Worth

Your credit card balance directly affects your net worth calculation:

Net Worth = Total Assets - Total Liabilities

A $3,000 credit card balance reduces your net worth by $3,000. As you pay down the balance, your net worth increases accordingly.

How Transactions Appear

Credit card transactions follow a specific sign convention:

• Purchases (expenses) — appear as positive amounts, increasing your balance
• Payments — appear as negative amounts, reducing your balance
• Refunds — appear as negative amounts, reducing your balance

Example

Transfers and Double-Counting

When you make a credit card payment from your chequing account, two transactions appear — one in each account. Mark both as transfers to prevent them from being counted as spending or income in your budget and reports.

Tips

• Review credit card transactions regularly to catch errors or fraud early
• Mark payments as transfers so they do not inflate your spending totals
• Track utilisation — keeping utilisation below 30% is generally good for your credit score