Horrible system to learn how to use credit cards with

I cannot for the life of me figure out credit cards!!!! I had my accounts all reconciled, my budget side matched my account balances - then I tried to pay down a credit card with money I had budgeted in a category and it just wouldn't work for anything.


YNAB may be wonderful, but  the annoying aspect of trying to learn how to use it for credit cards is so annoying and confusing. While I love the idea of this app, the credit cards process needs to be much simpler. It's HORRIBLE to use.

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  • What category did you have the money budgeted to?  You need to budget to the credit card payments category if you are paying off a card.

    Like 4
  • Credit cards are pretty straight forward if used properly.

    1. Make sure you assigned funds to cover the starting balance of the credit card directly to the credit card category (this only needs to be done once).
    2. Make sure you keep all of your normal categories correctly funded (don't overspend).
    3. When entering a credit card transaction, categorise it to the appropriate category ("groceries" for example). YNAB will AUTOMATICALLY move those funds from "groceries" to the credit card payment category.
    4. When making a payment to your credit card, make sure it is done as a TRANSFER between accounts.

    Have a read through those steps and see which one you might have missed.

    Like 5
  • Hi Beige Device ! If you're already reconciling as a brand new YNABer, I think you'll master credit cards in no time. We're happy to help figure out what's going on!

    Do you see a category group in your budget named Credit Card Payments, with a category for the specific card?  Or did you make your own? The credit card handling creates a category for you and it's an important part of making that process flow smoothly.

    If you assigned money toward a different category, go ahead and move money to the one with the same name as the credit card account. I sent you a quick email if that doesn't do the trick, so we can figure it out together. 🙂

    Like 1
  • You’re probably overthinking it. 

    1. budget move to categories according to purpose. Eg, $200 to groceries.

    2. Spend money from categories according to purpose, using credit card. Eg, spend $100 at grocery store, now $100 is left. 

    3.  Behind the scenes, that $100 has now moved from “groceries” to “card payment,” automatically reserving it for the next time you pay the card. 

    4. Repeat step 2 throughout the month. Don’t overspend your categories; move money before you do. Money will accumulate in “card payment” as you go.

    5. When it is time to pay the card, make a transfer from your checking account of no more than is in “credit card payment” for that card. 

    thre are some other ins and outs if you’re carrying a balance or if you start with a balance but wish to pay it off that first month, but that’s the basics. 

    Like 1
  • Not necessarily in response to the content of OP's post, but...

    I think the system YNAB uses is actually a great system to teach/learn how to use credit cards. It is one of the only systems I've encountered that clearly shows what is happening when you use a credit card, and how one accumulates debt (or not) and interest charges (or not) on a credit card. By not prematurely removing money from one's account, it clearly illustrates that one borrowed that money. By setting aside money from categories, the same way it does for cash accounts/etc., it makes one aware of the fact that in order to do the job one gave those dollars, they now have to be set aside to pay back that borrowed money.

    I do think it's slightly easier to grok the system if one enters credit card transactions on a mobile vs. the web, because the mobile literally shows the money moving from the category you spent it from to the card, but the system is a great teaching system. And there are some nuances that are confusing.

    But as a system to teach one what is actually happening when one uses a credit card, and how to use one appropriately? YNAB is awesome at that.

    Like 8
      • Vibrant
      • No more counting dollars, we'll be counting stars
      • vibrant
      • 3 mths ago
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      • Reported - view

      Fuzzball Meows I know people who hate the little money moving animations when you enter transactions on mobile, but I kind of love them and wish the web app had them too, even though I don't really *need* them. 

      Like 2
    • Vibrant I'm not sure how I feel about it, but it's a really clear demonstration of how YNAB is moving the money for you.

  • Hi Beige Device welcome to the YNAB family! There's LOTS of people here who have used this system for a really long time and are really good at helping people out when they get stuck.

    So there's two key things to work with when you start using YNAB in the beginning with credit cards. Once you've gotten some time under your belt it will be smooth sailing, but in the beginning it does take a little more thought.

    Firstly - are you carrying a balance on the credit card? Likely you've got some purchases, and maybe even some debt, on the card already when you set up YNAB. You need to make sure that your account reconciles so that your balance on the card matches your balance in YNAB.

    If you answers yes to this - then you will need to budget funds directly to this credit card. At the top of the budget is a section for credit card payments. Move funds from any category directly to the credit card with the balance.

    For any purchases that you make from here forward you will enter the transaction with whatever category assigned to it that you wish (groceries, etc). YNAB will automatically move the funds from your grocery category up to your credit card payments category, so it will be waiting there until the payment is due on the card.

    Carrying debt is normal for most people that start YNAB, as is discovering that you may have thought you were funding all of your spending but you were actually floating your credit card instead (don't stress if you're not sure what this means, there's lots of info out there on that, too). So whenever you get paid, and are budgeting funds, just be sure to go in and add some directly to the credit card payment category as you work on your debt. There's also lots of info out there on how to figure out a payment plan for yourself, and how long it will take to pay it off and things.

    This forum is a wealth of resources, so you're in the right place!

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