Credit Cards and Loans

What's the difference between a credit card and a loan account?

A Credit Card account and a Loan account are very similar, and in many cases you can use either.

Here are some guidelines for choosing which type of account to use in Goldenseal accounting software:

Credit Cards

Usually a credit card is a "revolving" account where you can charge any amount and pay any amount. It usually keeps a zero or negative balance, since you sometimes owe money to the credit card issuer, but they won't owe money to you.

Some types of cards should not be entered as a Credit Card account:

  • If you have a debit card which withdraws funds directly from a Checking account or Savings account, you'll enter checking or savings transactions with it. Don't use a credit card account for it.
  • If you have a store credit card that you pay through the Pay Bills command, you don't need a separate Credit Card account for it. Goldenseal will already track the amounts due as part of your regular accounts payable.
  • If an account allows you to write sequential checks, enter it as a Loan account.


A loan can be a line of credit with a "revolving" balance, or it can have a fixed payment schedule.

You can write checks from a Loan account, so it really acts the same as a Checking account. If you can write checks from an account and usually keep a negative balance, enter it as a Loan account. If you usually keep a positive balance, enter it as a Checking account. However, the only real difference is where the balance shows up on your Balance Sheet report.

HINT-- If the account balance is positive and negative for exactly equal times, you'll need to flip a coin to decide which type of account to use (heads = checking, tails = loan). If the coin lands on its edge and stays there, you'll need to mail the coin to our tech support staff for a ruling ;-)

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