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Quicken considers a transfer to be neither an income nor an expense transaction. As such transfers are excluded from Spending and Income reports and charts.
Suppose you are moving money from checking to savings. You did not spend (you still have the cash), and you did not earn income (you have same net worth you had before the transfer). As such, these transactions are neither income nor expenses.
The same logic applies to credit card payments (when you track your credit cards in Quicken, which is highly recommended). Your credit card account already contains a record of all your expenses (the credit card transactions). When you pay your credit card bill from your checking account, you do not want the entire payment amount to be considered an expense because this would cause you to double count your expenses.
For example: If you have $100 worth of charges on your credit card, which are tracked in Quicken using a credit card account, those transactions are already categorized as expenses and will show in Spending reports and charts (dining, entertainment, fuel, etc.).
If you then pay your bill in full with $100 from your checking account, you should consider this payment to be a transfer, not expense. Considering it an expense would incorrectly show you had $200 worth of spending. Instead you are transferring funds from a checking account to a credit card account.
The exception to this rule is if you do not pay your credit cards in full each month. In this case you are incurring an interest expense and should track the interest as an additional expense. If your financial institution includes your interest payment as a unique transaction within the downloaded transactions, you can just categorize that transaction as an expense. If the financial institution does not show the interest as a "transaction" (many do not), then you can split your credit payment--with the interest portion assigned an expense category and the remaining payment assigned as a transfer.
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A transfer can be part of a split
A split transaction can include a transfer. It's handled just like any other split line item.
For example, you may want to transfer some of your paycheck into a retirement account. Or you might want to transfer the portion of your mortgage payment that goes toward the loan principal into a liability account that tracks the loan balance, and assign an expense category to the interest portion of the payment. For these cases, just create a split transaction and make one (or more) of the split lines a transfer by selecting the appropriate account from the Transfer column in the split window.
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