Inserting transactions with debit card, cheque and prepaid card

[Robin Chattopadhyay]

At the risk of getting farther off-topic, I used to work in the electronic
payments area if a well-known bank. We would tell people to think of it
like this: "Pay ahead, pay now, or pay later."

A "debit card" or "check card" is the Pay Now element, it is a method of
accessing your own asset. As such, there is no special treatment in Gnucash
as it is just an extension of your checkbook and the asset I'm sure you
already have set up for your checking account.

A "credit card" is the Pay Later element, as you are borrowing money from
the bank at interest and paying it back over time. Obviously, this makes it
a liability in your books.

A "prepaid card" or "stored value" or "gift card" is the Pay Ahead element
where YOU are lending the bank money and withdrawing it at your schedule.
For Gnucash purposes, it is no different than a checking account and should
be treated as an asset.

On Tuesday, May 13, 2014, John Ralls <jralls at ceridwen.fremont.ca.us> wrote:

>
> On May 13, 2014, at 5:06 AM, Mike or Penny Novack <
> stepbystepfarm at mtdata.com <javascript:;>> wrote:
>
> >
> >>
> >> A debit card, a cheque book and a withdrawal in person are all
> >> different ways I can interact with a single account. The debit card and
> >> the cheque book are not assets in a financial sense, so this answer
> >> seems most logical.
> >>
> >> Liz
> >>
> > I might perhaps be misunderstanding the behavior of a "debit card" and
> perhaps we might be talking about more than one sort of thing going by that
> name. With me thinking about one and you the other.
> >
> > a) A card behaving like described above (simply allowing electronic
> transactions instead of paper checks) would not be a different asset
> account. You'd enter the transactions just like you did with checks.
> >
> > b) Going to the bank and cashing a check to put money in your wallet IS
> a transfer between two asset accounts.
> >
> > c) If the card behaved similarly to cash in your wallet, was for a
> designated total amount, but allowed for electronic payments rather than
> handing over physical money and coins then it is behaving as an asset
> account as in "b". When you "refill" the card like a transfer between
> checking and card.
>
> "a)" is a "debit" card. "c)" is a "stored value" or "gift" card.
>
> Regards,
> John Ralls
>
>
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