Double Line Method Supporting Balance Updates By Hand

Here is an example of the credit card register using the double line method with balances updated by hand after each entry (image is enlarged for best viewing):

   

Using both a white line and shaded line for each entry allows for quick manual calculations of the current debt balance and the available credit, for you can re-enter the transaction amount under each of these columns, then perform the arithmetic using basic arithmetic procedures (see our Arithmetic Primer for a quick review). You can of course use a calculator as well with this method, but when fast, easy manual calculations are preferred, this is the easiest method for updating the balances, because calculations can be quickly performed right on the page.

Note that under the Balance Column charges are ADDED and payments are SUBTRACTED, but under the Available Credit column the arithmetic operation is reversed: charges are SUBTRACTED and payments are ADDED. This instruction is provided on each page as part of the column headings, so you don't have to worry about having to memorize these rules, although over time they will likely sink into your memory as you update your register often (but when your mind goes blank, and it sometimes will, the rules are there to serve you!).

Another important benefit of using two lines for a transaction is that you can provide more description, including use of codes such as those suggested at the top of each page.

When reconciling your transactions and balances to those reported on statements from your financial institution, use a checkmark or "X" to mark off transactions that have been cleared by your financial institution.

If there is a change in your credit limit, adjust only the Available Credit amount by adding or subtracting the amount of the increase or decrease. Don't add or subtract the new credit limit itself, only the difference. For instance, as seen in the example above, if your credit limit is increased to $10,000 from $2,500, the amount of the increase is $7,500. This amount is entered as the adjustment to the Available Credit balance, entering 0.00 (Zero) for the adjustment to the Debt, as there is no change to how much is owed. Note that by adjusting only the Available Credit column in this manner, the recomputed Available Credit balance when added to the Debt balance should equal the new total credit limit. If not, you have made an error in the arithmetic.

After entering a credit limit adjustment, lightly cross out the old limit at the top of the page in the heading area, but keep it visible, because this was the correct credit limit until the date of the adjustment, so the previous limit is relevant to all the transactions that preceded the change. Write alongside the previous limit the new credit limit. When you start a new page, enter of course only the new limit on the new page.

Although most calculations can be performed easily by using basic add and subtract arithmetic right in the register, for some calculations, which should be infrequent, you will need a calculator or scratch paper:

  • If the amount you are subtracting from Available Credit is larger (in absolute terms) than the Available Credit, you will need to invert the numbers in order to perform the subtraction by hand, which you would do on some scratch paper, or otherwise use a calculator. This is seen in the above example when $26.73 needs to be subtracted from $3.39. Note that the signage of the result is the same as the larger number (in this case a negative value, which should be enclosed in parentheses for immediate clarification).
  • If the Available Credit balance becomes negative (as in the above example) you will need to "add" to this negative amount when making a payment. If the payment is larger than the negative balance, the resulting operation, in effect a subtraction, would need to be performed by inverting the amounts (on your scratch paper) in order to do the subtraction by hand. This is seen in the above example when $500.00 needs to be added to the negative ($23.34).
  • If the account balance itself is overpaid you will need to subtract a larger number (the amount paid) from a smaller number (the previous debt balance). This will result in a credit balance, that is a negative balance, as the bank now owes you. There is no example of this above, but the solution is the same as in the first example, as you will need to invert the numbers on some scratch paper in order to perform the subtraction, keeping the signage of the result the same as the larger number.
As stated, these situations are not frequent unless you often get very close to your credit limit just before your bank charges its interest or some other fee, which then would thrust your balance over your credit limit. (Fortunately by law, your bank can not charge you an overlimit fee when any of its own charges creates the overlimit condition). Also, it would likely be an infrequent situation when you would purposely overpay your debt balance, although some strategies call for this. (For example when you want to increase your card usage to obtain benefits your card provider offers, or when you plan to charge in the near future the price of a high end item that exceeds your credit limit, so you purposefully create a credit balance that would, in addition to your credit limit, provide sufficient funds to handle the charge.)

Some important tips:

  • Enter the amounts legibly and neatly. Since you will perform most of the arithmetic right in the register, give ample room for each amount (don't cram the digits too tightly together) and line up the digits the same for each row so that it will be easy to add one row to the previous row or subtract one row from the previous row. If the digits are not lined up properly you will be prone to many silly mistakes or have to rely more on scratch paper or a calculator more than you otherwise need to.

  • Do write the plus (+) and minus (-) sign before each amount according to its proper operation (as shown in the example). The proper operation is stated in the column headings on each page, where you it says for the Balance (Debt Balance) column, "Add Charge; Subtract Payment"and for the Available Credit column, "Subtract Charge; Add Payment". Placing the proper sign before the amount before performing the arithmetic assures that you will do the proper operation, and will help you track down errors due to assuming the wrong signage.

  • After every few rows have been computed, verify the accuracy of your arithmetic by adding together the Debt balance to the Available Credit balance. The total should equal your Credit Limit.

  • Perform the arithmetic before you enter your memo on the shaded row. If you enter the memo beforehand you may tend to over extend your memo into the area reserved for the balances. This precaution is one of the cons for using this method: Method 2 allows you to use the entire row for your memo if desired, but requires a calculator, or a lot of scratch paper!, which is its main drawback. But if you need more lines to enter a sufficient memo, you could simply overflow into the rows below. Just be sure to bring your balances down as well so that you could resume adding and subtracting your next entry from the current entry.

  • Before starting to use the registers, review your statements for the last twelve months and make a list of charges that were posted automatically to your credit card account according to agreements you have made. Determine which of these are still active. At the beginning of your register, on the special page designed for listing such automatic charges, enter the active automatic charges and their approximate dates using the instructions on that page (which are also provided in these instructions below). If you are carrying a debt balance, also include among these charges your approximate monthly interest. As per the instructions for this schedule, when the scheduled date arrives, enter the amount into your register. If the date was an approximate date, use a pencil for the date so you can correct it later. If the amount was an estimate, then when the exact amount is revealed from your statement or online inquiry, do not attempt to correct the amount at the row of the original entry, but use the row you are currently at in your register and first reverse the original estimate as a credit in the Payment/Credit column, then enter the actual charge as your next entry. This approach is more clear than entering an adjustment amount, although it does use up a few extra lines. Also for these adjusting entries, enter the actual date, even if in your register you are beyond that date. This helps when reviewing your register and also when reconciling your register entries and balances to the statements from your credit card provider. I would also be a good idea to place an asterisk or some other indicator, like an arrow pointing above, that flags those entries as belonging to a earlier date so you could readily see and account for them during your reconciliation.

  • HERE IS A VERY IMPORTANT TIP:  Whenever you refer to your Available Credit balance in order to decide what you can charge at any given moment, look back to see when the date when your last payment was made. If you mailed in your payment recently, you will need to allow enough days for the payment to be received and posted to your account. If there is any doubt as to when or if the payment was received and posted, call your credit card provider or access your account online to get that information. Until your payment is posted, your Available Credit from your provider's standpoint does not yet include the payment, so you may need to do a little side arithmetic (not in your register) to subtract out your payment to re-determine your actual Available Credit according to your provider's records as of that moment.

  • ANOTHER VERY IMPORTANT TIP: Whenever you refer to your Available Credit balance in order to decide what you can charge at any given moment, look also at your schedule of Automatic Charges at the beginning of your register (if you've filled it out) to see if any charges listed there are coming up soon, as you should be sure to leave enough credit available to cover the upcoming charge(s). For these purposes, you don't need to be too concerned about the upcoming interest or other charges by your card provider, as these will be charged regardless, and your provider cannot charge you an overlimit fee if their charges push your account over its credit limit -- in the U.S.A. anyway. But you wouldn't want a pre-authorized charge from a vendor or organization to be declined tomorrow because you used up today too much of your Available Credit. In a pinch, however, if you are certain you have several days before the upcoming automatic charge, you could use the Available Credit today, then arrange to get a payment to your provider immediately (an online payment is usually the fastest) so that your Available Credit will be sufficiently restored  to cover the automatic charge before it comes in for payment.
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