Help a newbie out - Credit Cards are confusing!

So, I started Ynab in Jan and my cards are still super confusing!  I had a starting balance on the Chase Card of $4957.46.  So, in Jan I actually made a $5518.24 and I also had several returns for ~$312.00 ... Questions - For the returns, I categorized them back to the category (i.e. I returned items to Walmart so I put the Category as walmart household and not as a 'payment' to the Credit Card).  Is the correct?    Also For the budgeting column, I keep reading to put only the starting balance to pay it off (which would be the $4957.46) even though my payment was >$5000 ... Is this correct?    Finally, WHY then is the last payment column 'green' and showing $2633.76?

Keeping in mind the numbers on the left side are the current balance on my cards and that balance is for mid-Feb now.  

Help.... Just trying to get January correct so I can move on to Feb!

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  • Also, when I make a payment to the card why does the summary show (-7,351.35) when that is a payment!  Shouldn't it be positive for a CC payment?

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    • StartingOver The right column is from the standpoint of the budget. A payment reduces the amount of money in the CC Payment category, so it's shown as negative. (FWIW, the left is from the viewpoint of the CC account.)

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    • Khaki Storm
    • YNAB book topics online: https://support.youneedabudget.com/r/q5w48j
    • Khaki_Storm.1
    • 1 yr ago
    • Reported - view

    This is my same complaint with YNAB, I like everything but the way it handles credit cards! I can't explain it, but the returns starts the mess. I've been using it since Dec. 

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  • I believe for a return, you would toggle the switch next to the dollar amount to change it to green (income). Enter the merchant as the payee and your credit card as the account. I’m still fairly new myself, but I believe this would be the way to do it. When you make a purchase with your credit card, it deducts the budgeted amount from your category, then automatically budgets that same amount to your credit card. So you’re dealing with your credit card from there, not the category. 

    Like 1
    • Khaki Storm
    • YNAB book topics online: https://support.youneedabudget.com/r/q5w48j
    • Khaki_Storm.1
    • 1 yr ago
    • Reported - view

    Here's a link where returns are explained. https://support.youneedabudget.com/t/h413v1/returns-on-credit-card

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  • It's February now, so look at February's budget numbers. No need to fix it in January at this point since you aren't making more payments in January.

    Your WF Credit has a zero balance, so your CC payment available should be $0.00 in February.

    Your Chase Credit balance is -$2606.11, so your payment available should be $2606.11 in February.

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    • nolesrule   this is what is in Feb.  I don't understand why it my Chase Credit doesn't match the balance on the card and why it says my WF Credit is -781.54 when I have a $0 balance on my card. 

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      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 1 yr ago
      • 3
      • Reported - view

      StartingOver Did you budget for the starting balance when you added the accounts to YNAB? Have all your purchases on the card since then been budgeted?

      If not, then the payment available is negative because you paid more to the card than you had available to pay. Likely due to not budgeting for the starting balance, or spending money on the card that was not budgeted for.

      Like 3
  • The payment available amounts can get out of sync with card balances for a few different reasons and will be higher if you had credit card rewards or returns that were credited to the card after a payment was already made or if you budgeted too much to the category to cover the card balance at the time you started using YNAB.

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  • StartingOver said:
    For the returns, I categorized them back to the category

     This is exactly correct. This keeps your averages & reports accurate.

    Like 1
  • StartingOver said:
    Finally, WHY then is the last payment column 'green' and showing $2633.76

    When you make a CC purchase, the amount of cash you hold doesn't change. If the purchase was budgeted (against a green category), then YNAB helpfully changes the job of that money from, say, Household to "Pay back the CC" (i.e., the Chase Credit Payment category). This increases what's in that payment category.

    There is no need to have the budget reserve more than you owe, though. (You owe $2606.11, the CC account balance.) Therefore, you can move $27.65 (= 2633.76 - 2606.11) out of the Chase payment category and put it wherever you like in the budget.

    YNAB does a fine job of accounting for budgeted purchases, but it doesn't adjust the CC Payment category for anything else. A purchase reward issued as a statement credit, for instance, will require your intervention to lower the CC Payment category (since the credit already paid part of what you owe).

    Bottom line: the Payment category for a paid-in-full CC should match the account balance (as a positive number).

    Like 5
  • StartingOver  Ben Khaki Storm  I've always been annoyed by the way credit cards work as well. I preferred the way it worked in YNAB4. I found an easy fix though: Just create a new Checking Account and move all your transactions over. You miss out on some comfort (e.g. you have to add a minus, to set a negative balance), but otherwise it just works as I hoped :-)

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      • bevocat
      • Sometimes, It Just Sucks to Be You
      • bevocat
      • 10 mths ago
      • 2
      • Reported - view

      Violet Unicorn (cb720cf1923d) You only get to do this if you're a completely paid-in-full user (not riding the credit card float) and you never ever intend to carry debt on that card.

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    • bevocat The debt on the card is deducted from the available money. I don't see a reason why you couldn't 'ride the credit card float' anyways. Would you care to elaborate?

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      • bevocat
      • Sometimes, It Just Sucks to Be You
      • bevocat
      • 10 mths ago
      • Reported - view

      Violet Unicorn (cb720cf1923d) You can't carry debt on it. Any overspending is going to be deducted from the next month's To Be Budgeted, as it is for any other cash overspending.

      If you're riding the float on a credit card type account, the debt you're carrying is rolled up in the credit card handling. If you're on a cash-based account, the float is Monopoly money in your budget categories.

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    • bevocat  Thanks, now I get it. I thought you were talking about the account balance, not the categories. You're right then, it only works when your categories stay positive.

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      • dakinemaui
      • dakinemaui
      • 10 mths ago
      • 1
      • Reported - view
      bevocat said:
      you never ever intend to carry debt on that card

      Ooo, "never" is such a strong word! 😉 If you do want to finance something or temporarily ride the float when using a checking account to represent your CC, it's a simple matter to make a balance transfer within YNAB (a single transaction) to a real credit-based account. When you're back to paid-in-full, another balance transfer back to the checking account.

      If this is a paid-in-full card right now (CC Payment category Available == working CC account balance), there's really no downside to representing it with a checking account right now. It simplifies such things as cash-back, gift card purchases, immediate reimbursements, and so forth. It absolutely prevents the accidental growth of long-term CC debt, since cash is reserved to pay the entire balance at all times.

      Like 1
      • bevocat
      • Sometimes, It Just Sucks to Be You
      • bevocat
      • 10 mths ago
      • Reported - view

      dakinemaui Fine! On that account.😋 You can do whatever you want with the card!

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  • So, I like YNAB, I like the idea behind the 4 rules but after watching I don't know how many videos and reading I don't know how many different articles and opinions, I have given up on the credit card function in YNAB. I now have them set as a fixed monthly expense just like my electricity or rent and I just budget into the category. I wasn't able to grasp the interest part of CC's within the app. I don't know if it's because I exclusively use it on an Android tablet app or because I'm stupid but this is what works for me. 

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      • mamster
      • mamster
      • 10 mths ago
      • 2
      • Reported - view

      Purple Wildcat This is fine if you're simply paying down a card and not using it for new transactions. It simply won't work for a card that's incurring new transactions.

      Like 2
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  • 10 mths agoLast active
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