Statement Cash Back?

Hi all, 

I have been using credit cards for a long time and this is the first time I'm applying my cashback rewards directly to my statement. They never enter my checking account, they just are applied directly to the total balance. How do I show this in YNAB? It wants me to give it a category like Inflow, but that's not really correct. 

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  • Hi,

    I know exactly what you mean.  I got confused by that too.   After doing some research I realized that simply set it as "To Be Budgeted"  you then need to take the money out of the credit card category and budget it else where.   I think that isn't as smooth as I would like it,  so instead, I set it as its own positive category called "Credit Card Rewards"  because you are actually taking the money that would have been sent to the "credit card" and "freeing" it up so it can be used else where in your budget.   So you can take that money and actually budget it.   The best part is I can then track how many rewards I have.

    Here is an example:  Let's say I have a balance of $2000 on my credit card.  My credit card company just issued me a cash reward of $200.  I categorize it as "Credit Card Rewards".   Then that credit card balance is now $1800.  I owe only $1800 not $2000.  Credit Card Rewards is now $200.  Which is correct because my balance is $1800.   So the $200 I would have spent to pay the credit card is now  available for me to budget elsewhere.    Very simple! 

    Here is a screen shot attached.  

    This seems to work well for me.  Would love to read what others do.  

    Reply Like 3
    • Those are great suggestions! As Tomato Ink mentioned, You could:

      • give the cashback inflow the category To be Budgeted
      • create a new category just for cashback

      And here's another way:

      • put them directly into an existing category.  I usually send mine to Family Fun or Stuff I Forgot to Budget For.

      However you do it, just be sure to check the Credit Card Payment category Available amount so that the number there is what you plan to pay next time you make a payment.

      Reply Like 2
  • Neither of these are a solution to what I'm looking for. I have debt on my credit card. It is not paid in full. I need those $50 to help my pay off the debt. I cannot use them elsewhere because that would defeat the purpose of paying down debt. I have tried allotting the dollars directly to my credit card category but this is not correct because they never entered my bank account. The dollars went directly to my current balance. 

    Reply Like 1
  • I'm also concerned that this is marked answered when I did not receive a satisfactory answer, or really any help at all. 

    Reply Like
    • Cornflower Blue Battery thanks for following up! Since you need those funds to help pay down the balance of your card, go ahead and categorize that reward transaction as Inflow: To Be Budgeted. You're right that those funds don't go into your checking account, but it is an inflow into your credit card account. When you categorize it as To Be Budgeted, you won't see the funds go into To Be Budgeted or apply to your Credit Card Payment category. Instead, you'll simply see the balance of the card decrease. And that's all you need!

      Feel free to tag me if you have any questions about this  :)

      Reply Like 8
    • Janelle - YNAB Team   I was going to say the same thing.   Cornflower Blue Battery (fd52077958e1)  I hope that helps.  Great job on paying down the debt!

      Reply Like
      • jmarieb16
      • Millennial Budgeting and Living
      • jmarieb16
      • 1 yr ago
      • Reported - view

      Janelle - YNAB Team  Tomato Ink (b81bd051fc5e)

       

      Thank you guys. This is exactly wht I was looking for. I was worried that it would actually go into my TBB, but this is something that I didn't entirely understand as previously it was a PIF card. It worked exactly as described!

      Reply Like
    • Cornflower Blue Battery Awesome! So glad to hear it :) Happy budgeting!

      Reply Like 1
    • Janelle - YNAB Team I've been using the new YNAB since it launched and the credit card payment categories have never made sense to me. I think your answer explains a big part of why and I'm incredibly upset by it. Can you point me to any documentation of this "feature"? I've read through the getting started guides in the past and even gone through again today, but don't see any reference to this behavior.

       

      I pay off my credit cards every month and make sure that all transactions have enough money allocated in the category they were charged against. If I categorize something as To Be Budgeted, I expect the money to show up in that category. Having a credit card transaction categorized as To Be Budgeted not apply to To Be Budgeted and only decrease the balance of the credit card account so I now need to move that amount from the credit card's payment category to a useful category is not only unintuitive, I view it as a bug. If I'd wanted it to use the statement credit to pay off the balance, I would have made the category the payment for the card or I would have explicitly moved the money from To Be Budgeted to Credit Card Payment.

      Reply Like 1
    • Tomato Colt glad you asked! Typically, you can categorize returns or refunds on credit cards to their original spending category. That saves you from having to move funds out of your Credit Card Payment category and into another. 

      In this case, the funds needed to be used to pay down the balance of the card. The payment field in the Credit Card Payment category tells us how much we have available to send toward the payment. But we don't make a payment that includes a refund or cash back that we've already received. It has already been applied to the account. So moving that money to the Credit Card Payment category would actually give us more than we need for the next payment. That's why all this YNABer needed to do was categorize that return as Inflow: To Be Budgeted - because all it needed to do was reduce the balance of the card. 

      Does that make sense? Feel free to tag me if you have questions!

      Reply Like
    • Janelle - YNAB Team no, that doesn't make sense to me. I get how it makes sense for the original post when there's debt on the card that needs to be covered and I agree that refunds are easier because you can just apply them to the same category as the original spending (although the reporting of this gets trickier when the refund is in a different month since ynab doesn't cary forward negative balances across months).

      Like you said, I can assign a category other than To Be Budgeted to a positive credit card transaction and the amount shows up in the amount available for that budget category. I assume that amount is also deducted from the credit card payment category. Why isn't it the same when I set the transactions category to To Be Budgeted? Why wouldn't it show up at the top of the budget and reduce the amount available for the card payment category?

      Reply Like
      • tobiv
      • tobiv
      • 1 yr ago
      • Reported - view

      Tomato Colt (0bcf162afc41) Because you don't actually have the money available. You're still in the red on the credit card, so why would you budget money you don't have? If you really need the money elsewhere just send it to an extra category, as shown in the first reply of this topic.

      Reply Like
    • Turquoise Song (1e20b5781d87) that doesn't make any sense. If I can't do it because the money's not available, why would I be able to send it to any other category? The account balance may be in the red, but this is new money coming into my budget. All of the spending that put the account balance in the red was already covered in my budget. So now when I allocate this new money to To Be Budgeted and it doesn't show up there, my credit card payment category is higher than the balance of the card and I have to move it from that category to somewhere else so I don't see why it wouldn't just go into To Be Budgeted like I asked it to.

      Reply Like 1
      • WordTenor
      • Your lieutenant, when there's reckoning to be reckoned.
      • WordTenor
      • 1 yr ago
      • 1
      • Reported - view

      Tomato Colt (0bcf162afc41)   Because it would be two different workflows.  Right now the way that statement credits work is they just reduce the debt that you owe on the card.  YNAB separates the debt that you owe from your plan to pay it back.  This is how low the system is able to handle things like reimbursements, overspending, incurring new debt and so on.  Sometimes you incur debt immediately create the plan to pay it back;  sometimes you don't (this shows up as overspending). 

       When you get a credit to your credit card account, it reduces the debt you owe.  But it doesn't affect your plan.  You have to change your plan.  And depending on what your plan was, you might not want to.  If you are carrying a balance, and your plan is to pay as much as you can, you just want your debt reduced without altering the amount of money that is in your plan. 

       

       It's true it could probably work the other way too, where if you got cashback, it would go into TBB and users could choose whether to budget it to the credit card or not.  But the web version seems to consistently err  on the side of making it easier for people  who are in worse financial situations.  So the onus is on the person who is already out of debt  to adjust the category, rather than on the person who is in debt to  figure out what they need to do to most effectively get out. 

      Reply Like 1
    • WordTenor the way I change my plan (budget) is by selecting what category the positive transaction is applied to. All transactions, both positive and negative, in all account types for all budget categories work the same way except for positive transactions in credit card accounts with a category of To Be Budgeted. That is the different workflow.

      I tested this out to be sure before posting: a credit card transaction that is an inflow assigned to any other category adds the amount to what's available in the budget category and subtracts the amount from the payment in the card's budget category with the caveat that if the category the transaction was assigned is negative, whatever amount of the transaction that covered the negative balance does not get subtracted from the card's payment category (this can get confusing if the negative amount was not created by the card that is getting the credit, but I understand how that would be a tricky problem to solve). It's exactly the same for credit card outflows. The amount is subtracted (adding a negative) from the available amount of the transactions budget category and added (subtracting a negative) from the card's balance category except any negative amount created on the transactions budget category does not get added to the card's payment because that's debt that's being created. 

      Categorizing a positive transaction as To Be Budgeted is the only thing that behaves differently as the amount does not get subtracted from the card's payment category and added to To Be Budgeted. I'm still waiting on Janelle - YNAB Team to explain to me how this isn't a bug and if it is considered a feature, where is it documented because it's counter intuitive to how everything else in YNAB works.

      Reply Like
      • WordTenor
      • Your lieutenant, when there's reckoning to be reckoned.
      • WordTenor
      • 1 yr ago
      • Reported - view

      Tomato Colt (0bcf162afc41)  I suspect Janelle's answer will be very similar but perhaps she'll be able to put it into words which will help you understand. I hope it helps! 

      Reply Like
    • Hi Janelle , it seems YNAB functions differently now (11/2/18) than it did 11 months ago. If I categorize the cashback as you suggest to ToBeBudgeted, the funds do not show up in the budget and the account balance is correct but my credit card payment is incorrect. If it matters, my Discover card is a budgeted account so I pay it in full every month.  See attached screenshot... Any ideas what's going on?

       

      Thanks

      Kevin

      Reply Like
    • Kevin Spear We did indeed change things recently (well, it was months ago 😊), and now returns on credit cards can be categorized right back to their original spending category. When you do this, dollars will automatically move from the Credit Card Payment category back to the spending category. This will also help keep your reports happy since your spending will be offset by the amount of the return.

      If you don't want the money back in the original category, you can move it to another one. 

       

      I hope that helps! 😊

      Reply Like
    • Jannelle OK, thanks for the quick reply! 

      When I put the cashback into a category used on a transaction for the card (let's say Dining Out), that cashback amount does reduce my payment on the credit card view, but it also increases available funds for that budget category by that same amount. 

      I must not be understanding something. That cashback money is not available to be spent, it's job is to pay a debt. When getting these funds from Discover, we can A-deposit to checking for use elsewhere or B-pay towards current balance. In this case, I chose B. So it shouldn't need a category; it's going straight to the payment amount.  How do I now have those same funds to spend elsewhere?

      Reply Like
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 2 mths ago
      • 2
      • Reported - view

      Kevin Spear It reduces the balance of your card, but doesn't change the amount budgeted to make your payment. If you are carrying debt, that's a good thing, because it means you can pay the same amount you originally planned to pay but your balance is lower.

      If you are a pay in full user, then the payment amount will be greater than the card balance, and you'll want to unbudget the funds from the payment category in order to get your payment amount and the card balance back in sync. And then those funds are available in your TBB.

      Reply Like 2
      • pepperpat
      • pepperpat
      • 2 wk ago
      • 1
      • Reported - view

      Janelle I came to the Forum hoping to find an answer to this same dilemma, albeit not expecting to find one, but here it is! I love the YNAB Forum!

      Reply Like 1
  • Hey Tomato Colt (0bcf162afc41) ,

    Janelle's actually out on vacation this week, so I hope you don't mind me jumping in! :)

    I saw it mentioned above that inflows to your credit card aren't actually available, and that's exactly what's going on here. When there's a negative balance on a credit card, categorizing an inflow as Inflow: To Be Budgeted covers that debt first. It's going into that account and that account is negative, so it can't add to your To Be Budgeted (because there isn't a positive balance). So, if there's a $100 balance on a credit card and you receive a $150 cashback reward, categorizing it as Inflow: To Be Budgeted would add $50 to your To Be Budgeted amount.

    Following the example above, you have a $100 balance on your credit card. Since all of the spending was budgeted for, you already have that $100 set aside to pay it off. This is when you'd want to categorize that cashback reward to another category, because you don't need it for the card balance.

    Let's say you don't need the cashback reward to cover the card balance, because you've already budgeted for that spending, but you categorize it as Inflow: To Be Budgeted anyway. The Available amount would be higher than the card balance - at that point you could use the move money feature to put those funds where you'd rather have them. ( Sidenote: If you ever make a payment on a credit card that gives the card a positive balance, the amount will be added to your To Be Budgeted amount to be budgeted towards your other categories).

    I hope that helps clear things up! Essentially, debt prevents you from being able to budget those funds if you leave them as Inflow: To Be Budgeted.

    Reply Like 3
  • I was 

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  • Thanks  Faness  Your response above finally clarified to me what is happening here. I have been using YNAB since last January and just noticed more funds available in one credit card than the balance shown. After doing a lot of searching I found this thread, then realized that the conceptual issue only occured with the cash back to the card balance transactions, not refunds due to store returns. With a refund I just naturally assigned the refund back to the category where it was spent. However, since the cash back to balance was not originally spent from a specific category, it made sense to assign it to To Be Budgets. The explanations for the current YNAB behavior above suggests a possibly better approach: If a cash back to balance is assigned to a specific category (other than to be budgeted) then YNAB acts as it currently does. However, if the cash back is assigned to To Be Budgeted AND the amount budgeted to pay the card is sufficient to pay the credit card balance, then any cash back that is over the amount needed should be placed into To Be Budgeted. So if a card's balance is $1000 and I have $$975 available to pay it, then I get a $50 cash back to the balance, allocating that $50 to to be budgeted should send $25 to cover the card balance and $25 to To Be Budgeted. If I had $1000 available, all $50 should appear in To Be Budgeted.

    Reply Like
  • I pay in full every month and receive a cash reward to my statement every month. So, just to keep things simple, I just categorize the cash reward to my "general merchandise" category where I usually spend a few thousand a month. Because the cash reward is about the same every month, this seems to work well. My advice is just pick an expenditure category that is pretty consistent (like groceries or general merchandise or gasoline) and apply it the same way every month. It's not perfect, but it works well enough.

    Now, if you're actually USING that reward to pay something off specific, change it to that category.

    Reply Like 1
  • Throwing my solution into the mix since it seems everyone has a different approach that makes sense for their situation.  When I added the cash back credit directly in the Credit Card account as Inflow to be Budgeted, I had an issue where that amount would add to my "To Be Paid" amount in the Credit Card Payment section of my budget.  For example:

    Let's say I have a $1000 balance on my CC, then budget & spend $200 on Groceries.  Total CC balance is now $1200, with a $200 payment showing on my Credit Card Payments budget section.  If I allocate a $100 cash back reward to Inflow - the "To Be Paid" field on my Credit Card Payments budget moves to $300.  This is problematic, because that transaction itself *was* a $100 payment, but YNAB is now expecting another $300 payment (instead of $100).

    MY APPROACH:
     I ended up creating an Unlinked account called Credit Card Rewards (though I suppose it could be Miscellaneous Credits or some more generic thing).  I deleted the CC synced Cash Rewards transaction, then added a transaction for the cash back amount as an Inflow into the Unlinked Rewards account.  Then I made a payment to the Credit Card from the Rewards account, which reduced my amount to be paid (instead of adding to it).

    Reply Like 2
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 1 mth ago
      • 1
      • Reported - view

      5nothing100 Don't do this. Your accounts do not match reality and will not reconcile correctly.

      The proper solution to your scenario was to adjust the Budgeted amount so that the Available to Pay matches your planned payment amount (for a PIF user that would be the balance on the card). This will release the money into TBB where it can be budgeted elsewhere.

      Reply Like 1
  • I've tried to follow this thread, but I'm still a little confused.  My situation is that I am very new to YNAB, I'm actually still finalizing my budget.  In the next week, we will have some returns hitting our credit cards.  I don't think I can assign them back to original categories since these were purchases from before I had YNAB.  Discover will also be sending me cash back in the form of a statement credit at some point.  I don't want these credits to reduce my monthly payment amounts -- I'd rather continue following my plan knowing that I'll get out of debt just a little bit faster.  Can I assign the credits such that my debt balance decreases without affecting my monthly payment amount, or giving me extra "money", which I really don't have, that I need to budget elsewhere?  I'm sure I'm over complicating things, but as I'm just starting out, I really don't want to mess this up.  Thanks for any advice.

    Reply Like
      • satcook
      • satcook
      • 2 wk ago
      • 2
      • Reported - view

      Tomato Barnacle give all inflows the category ‘to be budgeted’. This will reduce the balance on the card like you’re hoping to. 

      Reply Like 2
    • satcook I've tried this but it keeps showing the refund amount in my credit card payment category. So in other words it makes the balance green as if i made a purchase, and it also shows in my account balance in the sidebar even when i move it to a different category. It doesn't 0 it out which is why I'm still confused. Any suggestions?

      Reply Like
      • bevocat
      • Crazy Cat Lady
      • bevocat
      • 4 days ago
      • Reported - view

      Salmon Tiger Once you categorize the inflows as "to be budgeted", you need to add that same amount to the "budgeted" column of the category for that credit card payment.

      Reply Like
    • bevocat That 0's it out, but it's still showing a positive amount in the sidebar. And if I add that back to budgeted, doesn't that defeat the purpose of having saved on what I paid with the cash back?

      Reply Like
    • Hi Salmon Tiger !

      I'm not sure I follow exactly what's going on here. Would you mind if we took a closer look? If you’re up for it, go ahead and enable Support Access for your account. Once you’ve done that, let me know—and mention whether you’d like to continue the discussion here or via email instead.

      Reply Like
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