Credit card refund from a previous period

Hello,

I have only started using YNAB.

 

Here is my problem:

  1. My wife spent €200 on 31st March.
  2. We immediately reserved €200 from the category "wife" for the payment.
  3. This expense is in a credit card's (8-MAR - 7-APR) period.
  4. There will be an automatic pay off of the credit card on 16th April.
     
  5. My wife got a refund for her purchase €200 on 8th April.
  6. Unfortunately, the refund arrived in the new credit's card period (8-APR - 7-MAY).
     
  7. Now, how should I deal with this?
    1. The credit card still needs to have money allocated for the full pay off on 16th April.
    2. The refund should be budgeted back to "wife" category.
  8. For the moment, I have encoded the refund as a future transaction so that it takes effect only after the credit card is fully payed off.

Many thanks in advance for any suggestions!

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  • If the purchase was against a category with money Available, funds would have automatically moved to the CC Payment category. If there wasn't money in the category, you should try to move money to the category ASAP within the same month. It's only if you cannot cover that overspending in the same month that you would budget directly to the CC Payment category.

    Most would have simply categorized the purchase to Wife if that was a suitable "fit".

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  • sinister mole said:
    The credit card still needs to have money allocated for the full pay off on 16th April

    You should double-check this. Many cards credit refunds toward the "payment". Chase, for example, even labels the balance "Remaining Statement Balance".

    Furthermore, if you pay the "full" payoff, you may take the account positive, so don't do that.

    If this card has paid-in-full status, you should already have funds reserved to pay the entire debt. The refund won't change that as it is categorized to the original category which decreases both account and Payment category.

    Enter the refund dated for the date it actually occurred. 

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    • dakinemaui 

      Thanks for your suggestions

      The card automatically pays off "full" unless your don't have enough money on your current account.

      And the refund already belongs to the next period that would be payed off in mid-May. I've checked the statements.

      So in "credit card" terms, the original expenditure and the later refund are not connected as they belong to different credit card's periods. These are two different balances.

      I will wait until the moment the credit card pays off automatically. :)

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  • I would first say the same thing as  dakinemaui ... if you had money budgeted in your "wife" category, then the money has already been automatically budgeted to your credit card payment and you shouldn't have to worry about that part. If the "wife" category did not have the 200 budgeted already you will need to allocate funds for the payment by budgeting straight into your credit card payment. (A video that helped me figure this out was this: https://www.youtube.com/watch?v=d1GQbytjj3s on reimbursements in general, including credit cards)

    Hopefully this helps in some way!

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    • Evan Tuuk Thank you

      I am not worrying about how to pay off the credit card. But more about how to properly encode the refund.

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  • sinister mole said:
    And the refund already belongs to the next period that would be payed off in mid-May

    I realize the refund occurred after the statement closed. It doesn't matter.

    Date the inflow with the actual date and same category as the outflow. Your CC Payment category should still contain enough funds to pay in full. (If it doesn't, then it was too low even before the refund.)

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    • dakinemaui 

      I was doing the inflow to the credit card.

      Is that correct? Because doing so decreases my credit card "available".

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      • dakinemaui
      • dakinemaui
      • 5 mths ago
      • Reported - view

      sinister mole The account should match reality. If the store credited your CC, then record the inflow in the CC account. Yes, the CC Payment category will decrease, which is correct.

      I suspect they will actually pull less than the statement balance because they know about the refund. However, even if they pull the entire statement balance (or if this is a push through your bank's bill pay service), if you've made more than €200 in purchases since the statement closed, all will be fine.

      Just remember that money is fungible (loosely meaning interchangeable). It doesn't matter when or how funds get into the CC Payment category. If they are there, they can be used for a payment at any time. If you pay more now, they'll just ask for less next time.

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    • dakinemaui OK. Thank you for the detailed explanation. :)

      I will see what happens on the credit card pay off day. ;-)

      Like 1
  • sinister mole said:
    The card automatically pays off "full" unless your don't have enough money on your current account.
    And the refund already belongs to the next period that would be payed off in mid-May.

    These two statements contradict each other. A full payment will take the account balance to $0, which covers transactions occurring AFTER the statement closed. It covers everything up to the date of payment.

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    • dakinemaui Indeed you're right. There is a contradiction.

      I should have said: the card automatically pays off the whole balance for a given period.

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      • dakinemaui
      • dakinemaui
      • 5 mths ago
      • Reported - view

      sinister mole So the auto-payment is for the statement balance. You'll note that you will have had nearly a month's worth of purchases that will increase the Available payment amount before the April payment is made. If that is at least €200, there is no problem. There's probably sufficient funds right now.

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