PayPal payments with credit card - how to categorize?

theromm

I like the fact that my PayPal transactions paid through a credit card are linked to each other which avoids a double count.

However, in one of those transactions, I need to mark the category of the transaction. Since the category field is used to mark the linkage between the two accounts, I am unable to use it.

What's the recommended approach to categorize such transactions? For ex, I paid for an event using PayPal which used by credit card. I want to mark the PayPal transaction as Entertainment and the credit card transaction as a transfer.

Is it possible?

Coach Natalie

@theromm, thanks for posting your inquiry to the Community!

Based on your description, it sounds like the transactions in question are using a Linked Transfer, so the amounts will offset each other. If you want to count one as an expense and keep one as neutral, you can do exactly what you mentioned — give the PayPal transaction an Expense Category, and then use the Category of just "Transfer" for the credit card side.

https://help.simplifimoney.com/en/articles/3352152-how-do-transfers-work

Let us know how this works for you!

-Coach Natalie

theromm

Thanks! There are a lot of such transactions, so I am assuming if I change the linkage on PayPal transaction, it will break the linkage on the credit card side automatically. That way, I can go through my PayPal transactions and mark them to the correct categories and not have to worry about updating the "other side" of those transactions.

Coach Natalie

@theromm, exactly! Though you may still need to update the other side to "Transfer", as I believe they will become "Uncategorized".

-Coach Natalie

theromm

Thanks. You know what I observed - all the PayPal transactions going through a credit card seem to be automatically duplicated and one of them is a transfer and the other is a "regular" PayPal transaction. Weird but also, magical? I think this is the way I'd want it unless you think it is a bug, @Coach Natalie ?

Coach Natalie

@theromm, I believe this is by design (PayPal's design), and why some users elect to not add their PayPal credit cards in Quicken Simplifi and just track everything through the main PayPal account.

https://community.simplifimoney.com/discussion/1514/automatically-de-dupe-paypal-transactions

https://community.simplifimoney.com/discussion/2569/automatically-treat-transfers-to-and-from-paypal-as-transfers-in-simplifi

-Coach Natalie

theromm

Thanks! To clarify, I am not using PayPal credit card, I am using PayPal as a payment mechanism, but it allows me to buy stuff using a credit card in the PayPal account. As a result a $20 PayPal transaction which I process using my Amex ends up creating two transactions for me regardless of the app I use - a $20 PayPal transaction and a $20 Amex charge.

I like that Simplifi links the two and I also like that in my PayPal account I see two transactions (so a total of 3 overall). Of the two, one is a transfer and the other is a regular PayPal transaction - and this latter part is what helps me in my original question.