how to setup a revolving credit facility account

David Latham david at sitedesign.co.nz
Mon Jun 4 04:26:22 EDT 2007


OK, Group,  Here is the answer I was looking for.  I realise this may
have been answered by others but Ariel has CLARIFIED it to my non
accountant brain.  I always thought it was an asset, and it is:  Its a
house so it must be.  The credit limit is not an asset.  I see that now.
The house is an asset.  So now with my head in the right place, I should
be able to work something out.

Thanks ROBERT for letting me know that GNU Cash does not keep track of
available credit.  That is useful to know.

Can I just say, "THANK YOU VERY VERY MUCH FOR YOUR FREE ADVICE!."  I
mean it.  Its very helpful to us.  We're trying like mad at the moment
to keep accurate budgets so that we might take the little one (2 yrs
old) skiing in August. (New Zealand August is a good time for skiing and
tobogganing / sledging)

Best Regards,

David Latham

On Mon, 2007-06-04 at 03:39 -0400, Ariel wrote:

> On Sun, 3 Jun 2007, Cam Ellison wrote:
> 
> > David Latham wrote:
> 
> >> It looks like this might be the best way to go about it.  I still find
> >> it unfortunate that there is no way to record the available credit
> >> because: It is in fact an asset.
> 
> > I beg to differ.  It is not cash you actually possess, nor a certificate
> > invested with some kind of value.  If you take money from it and put it
> > into another account, that money is an asset, with an offsetting
> > liability that costs you in interest.
> 
> He's right: your available credit is NOT an asset. It's not anything 
> except a number saying how much the bank is willing to lend you right now.
> 
> Now, if you tell me that the bank will lend you only as much money as you 
> have house to back it up then I will tell you that your _house_ is an 
> asset.
> 
> If you want to know your credit limit is, just subtract how much you 
> borrowed from how much your house is worth.
> 
> But a credit limit is not an asset.
> 
>  	-Ariel
> 
> 


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