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How Debt Accounts Work

Debt accounts (also called liability accounts) track money you owe to others. This includes credit cards, loans, and any other obligations.

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Why Debt Math Seems “Backwards”

If you’re used to thinking about asset accounts, debt accounts can feel counterintuitive at first. Here’s the key difference: And transactions work in the opposite direction from assets:
[!TIP] Think of a debt balance as “Amount Owed” rather than “money I have.” A higher number means you owe more, not that you have more.

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Credit Card Example

Let’s walk through a typical credit card scenario: Notice how spending increases the balance (you owe more) and payments decrease it (you owe less).

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Overpayment Scenario

What happens if you pay more than you owe? A negative balance on a credit card means you’ve overpaid—the credit card company owes you money. This might happen from:
  • Overpayment
  • Refunds for returned purchases
  • Statement credits or rewards

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Types of Debt Accounts

Sure supports three types of liability accounts:

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Credit Card

Track your credit card balances and spending. Credit card accounts can include:

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Loan

Track mortgages, auto loans, student loans, and other installment debt. Loan accounts support additional fields:
[!NOTE] For fixed-rate loans, Sure can calculate your monthly payment automatically based on the original balance, interest rate, and term.

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Other Liability

For debts that don’t fit the above categories:
  • Personal loans from friends/family
  • Medical bills
  • IOUs
  • Tax obligations

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How Debt Affects Net Worth

Liabilities reduce your net worth:
When you pay down debt, your net worth increases (even though your cash decreases). This is because the debt reduction outweighs the cash spent—you’re converting a liquid asset (cash) into reduced liability (less debt).

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Example: Paying Off a Credit Card

Your net worth stays the same because you traded 500ofcashfor500 of cash for 500 of debt reduction. But now you have no credit card debt!

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Adding Debt Accounts

To add a debt account:
  1. Click + Add Account on your dashboard
  2. Select the liability type (Credit Card, Loan, or Other Liability)
  3. Enter your account details:
    • Account name
    • Current balance (the amount you owe)
    • For loans: interest rate, term, and rate type
  4. Click Create Account
[!IMPORTANT] Make sure to select a liability account type (Credit Card, Loan, or Other Liability) when adding debt. If you accidentally create a Cash account for your credit card, the balance calculations will be incorrect.

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Understanding Loan Payments

When you make a loan payment, the payment typically covers:
  1. Interest - Cost of borrowing
  2. Principal - Reducing the amount you owe
Sure tracks your loan balance, which represents the remaining principal. As you make payments, the balance decreases until the loan is paid off.
[!TIP] To track loan payments accurately, create a transfer from your checking account to your loan account. This properly reflects the payment in both accounts.