Making a credit card payment or bank transfer should be classified as a “Transfer”. This ensures that the transaction is not double-counted at the end of the year, come tax time. See below for the following example:
On 5/6, a deposit was made into the bank account in the amount of $3,232.54. On that same day, that money was either transferred to a different account, or pulled out to pay off a credit card. In this case, we want to classify the initial deposit as “income” (for example, when tenants pay you rent), and then on the withdrawal transaction, we want to classify it as a “transfer”.
Classifying the second transaction as “transfer” makes sure that it does not get classified as a traditional expense, for example when you have a maintenance request or repair.
In other words, classifying a transaction as “transfer”, essentially makes sure that it “doesn’t count” against either your income or your expenses.