Credit card is not an uncommon thing nowadays. Most people are aware of it and are opting for its services. It comes with several advantages like- it allows you to build credit, you can earn rewards like cashback, eliminates foreign transaction fees, enhances purchasing power, and it is not linked to savings or checking account. 

All of the credit card users have come across the term “opening balance” in credit cards. In this article, we are going to discuss what it is and how to create or later change it.

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What is an opening credit card balance?

If you take a look at your newest statement or log in online, you will find an opening balance of credit card. An opening credit card balance is the amount you owed to the company of the credit card at the previous billing cycle’s end. 

But, if there are instances when someone may not spend any money in his or her last billing cycle, and there were no fees from the company of the credit card, then he or she may notice that the credit card balance may be a value of zero, which is always a good thing. 

The current statement’s opening balance must be the same amount as the previous statement’s closing balance.

For an example: 

Billing cycle: March 2nd to April 2nd 

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How to enter an opening balance for a credit card?

Follow the given below steps to set the opening balance for credit cards:

Step 1: Firstly, you will need to sign in to your bank’s official website, or you may also get the statements of your bank.

Step 2: Locate the “Company” menu in QuickBooks.

Step 3: Over there, click on “Chart of Accounts.”

Step 4: On your chart of accounts, you will need to right-click anywhere.

Step 5: Then tap on “New.”

Step 6: For the account type, select “Credit Card.”

Step 7: Now, tap on “Continue.”

Step 8: Give a decent name to your account. And if you are having the same type of multiple accounts, or if you have multiple accounts at the same bank, with unique names. It is easy to tell apart.

Step 9: The rest of the data fields need to be filled out.

Step 10: Now, tap on “Enter Opening Balance.” 

Later on, if you want to edit your opening balance, the button will change to “Change Opening Balance.”

Remember that what you input as the opening balance is entirely dependent upon how you want to handle your previous or past transactions:

1. If you do not plan to input the older transactions that come way before the date of opening balance in QuickBooks, input the ending balance and ending date from your most recent bank statement. Then, click on “OK”. It will summarize all of your past transactions. Now, you will be able to start tracking new transactions that are going forward.
2. If you are willing to input your past transactions in detail, at the very first, you will need to decide that how far you want to go. Choose a date that is older than the oldest transaction that you wish to track in QuickBooks. Your opening balance will summarize everything before the date you choose. In the “Ending date” field, input the date you have chosen, and in the “Ending Balance” field, input your real-life account’s balance for the date. Then, click on “OK.” This particular method will prevent you from counting past transactions twice.

Step 11: After you are completed with the above steps, tap on “Save & Close.” It will record the opening balance.

How to change or update the opening balance?

We have prepared s list of few steps that you will need to perform to change or update your opening balance for an account:

Step 1: Go to the toolbar, and click on the “Gear” icon.

Step 2: Now, locate “Your Company,” and from there select “Chart of Accounts.”

Step 3: Then, locate the account.

Step 4: Click on the “Action” column drop-down menu.

Step 5: Then select “Run Report.”

Step 6: Now, in the “Report period” drop-down list, tap on “All Dates.”

Step 7: Now, click on “Run Report.”

Step 8: Click on the earliest deposit that is marked as “Opening Balance” in the “Memo/Description” area to open the “Bank Deposit” window.

Step 9: Now, in the “Date” field, input the new date of the opening balance.

Step 10: Then, locate the “Add funds to this deposit” section.

Step 11: Over there, in the “Amount” column, input the new opening balance for the “Opening Balance Equity.”

Step 12: Finally, click on “Save and Close.”

Conclusion:

A credit card’s opening balance is the sum of the amount of all the recorded bank transactions at the statement period’s beginning. If you possess an unsettled balance, and there is no payment applied, then the starting balance won’t be equal to zero. 

Indeed, it is an easy concept to understand. But, entering an opening balance or editing it later may not be that easy. If you are not familiar with accounting-related stuff, get in touch with an expert.