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How to Clear a Credit Card Overpayment Refund in QuickBooks

Learn how to record a refund check from your credit card company in QuickBooks Online so your credit card account balance clears to zero.

 

NOTE: This applies when you've closed or overpaid a credit card account, the credit card company has sent you a refund check, and you've already deposited it into your operating account. 

If you've ever overpaid a credit card or received a large vendor refund back to a card — you may end up with a negative balance on that credit card account in QuickBooks Online. The credit card company will send you a check for that amount, and you'll need to record it correctly so the account clears to zero.

Here's exactly how to do it.

  1. Confirm the refund check has been deposited into your operating/checking account before proceeding.
  2. Click + New and select Bank Deposit.
  3. Under Add funds to this deposit, enter the credit card company (e.g., Chase Visa) in the Received From field. If the credit card company isn't already set up as a vendor in your books, add them as a vendor first.
  4. Set the Account field to the credit card account — in this example, Visa. This is what offsets the negative balance.

  

  1. Enter the refund amount and add a memo such as Refund if needed.
  2. Click Save and close (or Post if you're working in the register view).
  3. Return to Chart of Accounts, find the credit card account, and refresh the register to confirm the balance is now zero.

   

The reason this works is that by selecting the credit card account as the offset, QuickBooks knows the deposit into your checking account is coming from that liability, not from income. The two entries cancel each other out, and the credit card account clears cleanly.

Have questions? Reach out to your C2 Accounting team. We're happy to help.