I don't understand "Credit Card Payments"

I don't understand the new Credit Card section in "the new YNAB". It seems to be showing me some arbitrary numbers that have some relation to my credit card balance (but are not actually my balance). Why are these numbers green if they are debt? Am I supposed to be putting budget into these categories, any why? Can I just permanently hide this section? The old method worked OK for me (pay my credit card statement balance every month) and the way YNAB handles it is frankly baffling.

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  • The credit card payment amount is equal to the balance on your credit card that is backed by budgeted spending.

    If you pay in full, then the numbers should match up. However there is a list of reasons they can get out of sync...

     

    • starting balance on a paid-in-full card - category is lower
    • overspending - category is lower
    • uncategorized transactions - category is lower
    • outgoing transfers to other on-budget accounts (e.g., gift card account, mixed funding splits) - category is lower
    • purchase/cash-back rewards (should be categorized to TBB) - category is higher
    • categorizing item returns as TBB (should use the original spending category instead) - category is higher
    • reconciliation adjustment - category is lower for an outflow adjustment, higher for an inflow adjustment
    • taking the account balance positive - category should be $0 in this case
    Reply Like 1
    • nolesrule why outgoing transfers are deduced? Let's say I had to cash $100 from my credit card. Now I get $100 cash, but YNAB complains on $100 overspending on credit, though I haven't spent them yet, they are still in my pocket. After I transfered those $100 back, I'm black in black with bank, and from my standpoint I spent nothing (interest aside), but YNAB has load of red and orange labels around: negative availability in budget, negative payment in credit account and still overspending in it.

      Am I doing something wrong?

      Reply Like
    • Andriy Kvasnytsya If you transfer $100 from CC to Wallet, you add $100 to TBB and add $100 balance to your CC.  This balance is not budgeted for, so it won't be added to your CC payment category.  You therefore need to budget the $100 directly to the payment category.

      Reply Like
  • Also, if you did a Migration from YNAB4, the Pre-YNAB debt category management isn't handled correctly in the migration because of the transition from having "red arrows" in YNAB4 to no "red arrows" in nYNAB. This can cause your payment balances to be off by a lot (and also balances in other categories and in TBB). This discrepancy can be manually corrected in the current month. No need to fix previous months.

    Reply Like 1
  • Credit card handling in the new YNAB is very different! It took me a while to love it, but now I really do. :-)

    The Available column in your Credit Card Payment category is the amount of money reserved for your credit card payment. It's green because it's money you still have that's been set aside for your next payment. 

    Here are the two ways money gets into your credit card payment category:

    1. When you purchase something you budgeted for and use a credit card, we call that budgeted spending. Dollars from budgeted spending on a credit card will automatically be moved from the category where you budgeted them (like groceries) to your credit card payment category. Your grocery Available goes down by $70, your credit card payments Available goes up by $70.

    2. When you budget additional dollars to your credit card payment to pay down that balance even more. They'll be added to the dollars that got there via budgeted spending. For example – budgeting for the starting balance on the card.

    Does that help?

    Reply Like 2
  • I'm also just going to move this discussion over to Q&A > Credit Cards. :-)

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  • Hey devin c !

    I'm going to go ahead and mark this question as answered, but if you still have questions don't hesitate to continue the thread here! :)

    Reply Like
  • OK, I suppose that makes sense. But I'm confused about my particular account. All my CC spending was backed by budgeting, and I just paid my CC bill, and now it's a few thousand dollars in the red, and my "Available To Budget" numbers are waaaay down. Was there maybe a snafu importing my YNAB4 stuff? I never did the red arrow thing. How could I try and address this?

    Reply Like
      • devin c
      • Orange_Gazelle_6b11cbd1
      • 1 yr ago
      • Reported - view

      I was wrong, my TBB numbers did not go down, but rather, up. ??? (see below)

      Reply Like
  • I should note that I always recorded CC payments as a "Transfer" from my checking account to my CC account. Is this wrong now? Do I need to go back and readjust those?

    Reply Like
  • Also, when I flip through my history in the new YNAB, it seems like essentially random numbers are in the "Payment" category historically. I'm extremely confused.

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

      devin c If you imported your YNAB 4 budget into nYNAB past months are going to be all messed up because there is no way to convert the red arrow. YNAB generally advises to do a fresh start rather than converting the budget. The other thing is to basically ignore all that wonkiness in the past and just make sure that category and account balances match in the month you start nYNAB (admittedly I find both of these options less than optimal).

      Reply Like
      • devin c
      • Orange_Gazelle_6b11cbd1
      • 1 yr ago
      • Reported - view

      jenmas thanks for the reply! Maybe I don’t understand what “the red arrow” means, because I thought I never used it in the old YNAB.  I would never “carry forward” overspending in a category to the next month (this is what I thought it meant?). But, I would sometimes overspend in a month without covering every penny! The overspent amount would be noted as “Overspent in <last month>” when calculating the next month’s TBB. 

       

      And I think this is actually my problem: when I look at previous months in The New YNAB, the “Overspent in <last month>” category is 0.00 every month. So, all the overspending I ever did just rolled all the way up to now and The New YNAB told me I had hundreds of dollars to budget more my first month than I actually did! (Until I paid my CC bill, that is.)

       

      This seems like a bug to me. At least, it doesn’t make sense to me to have the “Overspent in...” line item if it’s always zero! For the moment, I can cover the CC mismatch with my savings category, which is where my extra dollars (which never actually existed) went, anyway. (Luckily it was only a few hundred bucks!) And I can make sure I cover all my orange circles when they develop in the future so this doesn’t happen again. Still, seems like a bug. What do you think?

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

      devin c You weren't using the red arrow, but you were allowing YNAB to take your overspending from next month's ATB. YNAB 4 treated cash and credit overspending exactly the same. nYNAB does not do that. It will take cash overspending out of TBB but it converts credit card overspending to the credit card debt category. Now let's say that on October 31 you had $3 left in your restaurant category and you went to McDonald's and spent $4.45 and paid with a $5 bill. In your mind that is cash overspending because the transaction that caused the overspending was a cash transaction. However, since on October 2 you had a credit card transaction in the restaurant category, nYNAB treats the category overspending as credit card debt. So that's what happened to all your past stuff most likely. I can't address the header stuff because I don't use nYNAB so haven't had to deal with any overspending in it.

      Reply Like 1
  • I feel like this might just be due to my CC statement happening out of sync with month boundaries. I pay my credit card around the middle of the month, so it includes some of last month's spending. The only month for which the "Activity" column matches the "Payment" column was the very first month I had this card open. Is this just another number I can safely ignore in the new YNAB?

    Reply Like
      • devin c
      • Orange_Gazelle_6b11cbd1
      • 1 yr ago
      • Reported - view

      devin c the transaction record is spotless, and reconciles with my CC statements, and flipping back through I only have one red entry in my entire history, for like three dollars a few years ago.

      Reply Like
      • devin c
      • Orange_Gazelle_6b11cbd1
      • 1 yr ago
      • Reported - view

      Hmmm, no, I can't ignore it, because it affects my "To Be Budgeted" for next month. The amount it thinks I "overspent" by paying my credit card this month has been removed from my available to spend next month. I hate this and feel like I can't trust these numbers anymore.

      Reply Like
  • The thing that really freaks me out is that my "To Be Budgeted" numbers change when I enter my CC payment. TBB goes *up* when my "Payment" category for this month turns red! Extremely extremely confused!!

    Reply Like
  • I just have to throw my hat in this ring as well, because I'm right there with devin c  - I absolutely do not understand how this updated CC section is supposed to work. None of the explanations I've read or watch make any sense to me. I really preferred how it was before. :( This misunderstanding is actually making it really difficult for me to really use YNAB to its best potential and just leaves me feeling frustrated and unsuccessful each month, feeling like I'm really unsure if I've done what I wanted to do with my CCs for my pay down plans.

    Reply Like 3
      • Khaki Hail
      • Khaki_Hail.3
      • 1 yr ago
      • 1
      • Reported - view

      Orchid Display  me too 😭

      Reply Like 1
    • Orchid Display I concur.  Long time user of YNAB4 - and this new accounting angle seems unnecessary.  I pay my CC's in full every month - and the way YNAB4 handled it was flawless.  So disappointed.   I've struggled for months with the new version. :(

      Reply Like 2
  • If you are a pay in full credit card user, you have to budget for the starting balance when you start using nYNAB and all of your forward credit card spending must be budgeted for. The payment amount should always be in sync wit h the balance of the credit card account, otherwise that means the entire balance of your card is not backed by cash in your bank accounts.

     

    It's also very possible you are having issues because you are riding the credit card float. Relying on future income to pay next month's credit card bill (which are this month's spending), rather than having credit card spending based on only your actual available cash.

    Reply Like 1
    • nolesrule - I pay my CC in full every month, yet it's still overbudgeting the payment amount set aside (available) to pay the balance in full. This happens every month it seems. Something is not right with the way this new CC approach works.

      Reply Like
      • WordTenor
      • Arranged the menu, the venue, the seating.
      • WordTenor
      • 1 yr ago
      • Reported - view

      Edit: see my post in your other thread. This needed more info.

      Reply Like
  • Okay ... so I had one CC category where I had a small payment showing in green. So I made a payment in that amount to that CC. Once it imported into my accounts, the payment then went to $0 and turned grey. I think I sort of understand how it works now - I understood the why of it happening, I just wasn't for some reason understanding the how of doing it. I think this small experiment has finally helped me understand what this new CC system is wanting me to do. Of course, it will all be easier when they're all paid down and I don't have to worry about them at all, but that's true for all things CC lol ;)

     

    Thanks for all your help, everybody.

    Reply Like
  • Yeah, I think it's starting to make sense to me as well. And it sounds like some of the things that make it confusing are designed to make it better and more helpful at people who have CC debt that needs to be paid down (which is no longer me, thanks YNAB!). To me, it still sounds like they have some designing to do, because everyone sounds pretty confused!

    I think my original problem was as pointed outby someone further upthread: in the past, I had let some of my categories slip over by a few dollars, and I'd just let it come out of "To Be Budgeted" for the next month automatically. But now, that only happens if you overspend on a cash account, not a CC. (This decision is still a little mystifying to me. "Cover overspending with TBB" makes sense to me as a default, even if it's a bad idea if you do it too much! And why would CCs be different than cash in this regard? It's all money...)

    Anyway, I did one big adjustment out of TBB to cover all that historical slop, and now that I'm careful about keeping all my categories green, the numbers seem to match now Whew!

    Reply Like 2
  • The problem with the new credit card (2 days now) approach is that it forces you to categorize interest charges to your card on the budget page. My budget looks completely screwed up now because of this idiocy.

     

    Example: I imported the 2 interest charges (existing balance and purchases) on one card. These obviously came on the new statement after my monthly payment. As they imported, I was required to put them in a budget category. Now, despite my payment being exactly what I wanted it to be, and my budget being on point, my budget page shows me as over-budgeted on interest and fees for the month. The obvious solution is that those interest charges, when imported, should be classified as "category not needed" just like payments to the card are. They're separate from my January budget and should not appear on the page. I budget for the total payment, and it's idiotic to have those new charges have to be categorized anywhere at all. I would just delete the interest charges and hope the account reconciles properly, but I doubt that would work.

     

    Whoever came up with this new feature failed big time. Thankfully, the solution should be fairly easy to implement, but it's driving me nuts to see my budget page all jacked up because someone wasn't smart enough to implement the new approach to credit cards properly.

    Reply Like
    • Forest Green Lightning What other changes did you make to your budget in the last two days? As far as I know, the current cloud-based version of YNAB has required one to categorize interest for "on budget" credit cards for the whole time this version has existed (the past 2+ years?).

      Reply Like
  • I'm in the same boat as you Devin.  I pay off the CC's before the end of each month and really enjoyed the way YNAB used to do this.  I just do not understand the seemingly random numbers that show up in those categories each month now. I just try to match budget with what I spent and hope it works out.

    Reply Like
  • Still confused...

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  • Confused like everybody else.  Just switching to new YNAB from YNAB 4 at this moment.  Saw the new credit card payments category, which made no sense to me, which led me here, which hasn't cleared it up. Is it not possible to delete the credit card payment section all together and treat payments as a transfer without a category? For me, one of YNABs biggest strengths is immediately forcing you to look at all money as money and not account #1 money, account #2 money, etc.  Does this new feature take a step backward in this regard? ~Jed

    Reply Like
    • Coral Hail You can hide the credit card section on your budget, moving it down to the Hidden Categories section.

      Reply Like
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 1 yr ago
      • Reported - view

      Gray Admiral That would not be recommended. You won't know if your budget is "balanced" because of the way nYNAB interacts with credit card accounts without keeping an eye on the CC payment categories.

      The purpose of the CC payment category is to tell you how much money you have in your cash accounts available for making your credit card payments. And there are ways that can change depending on your transactions and spending within certain categories.

      If you are a paid in full credit card user, then you know what that payment category amount has to be. it has to be enough to cover the entire balance on the card. If you find that not to be the case, then you either have to make an adjustment to your categories to rectify it, or not pay off your credit card balance.

      But you can't just ignore it. if you do, then you cannot rely on any of the categories in your budget to be accurate.

      Reply Like
  • Add me to the count of confused users.  I've been pulling my hair our for the past hour trying to figure why the mismatch in my CC payment.  

    Reply Like 1
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 1 yr ago
      • Reported - view

      Alice Blue Griffin Did you review the very first reply to this thread?

      In addition to that list, I've found that returns made after the credit card payment can also cause issues.

      Reply Like
    • Alice Blue Griffin ugh, me too. this is driving me nuts

      Reply Like 1
    • Tan Commander I'm there, too. I pay off cc monthly and have zero running balance. Let's say my cleared cc balance is -600, my payment is +300. How can I not have +600 for the payment? My age of money is like 60 days, so I'm lost as to how I don't have +600 for the payment.

      Reply Like 1
    • Tan Commander Ok, so I went back through the whole 2 years, thankfully only 2, I think I'm in the category of having overspending occasionally at the end of months, that in the wash, is fine for zero balance credit card. I went through and adjusted the budgeted amounts in categories I overspent. The TBB amount stayed 0.00, but I just changed the budgeted categories to make everything either 0 balance or green. Now, I don't know how, but now for this month I'm over-budgeted in my credit card payment by +1.99. So, somehow, some way, I got the payment to 0 (after I just paid the total monthly balance).

      Reply Like
    • Powder Blue Network I think I am taking a similar approach where I'm keeping the available amount at 0 and setting that aside to  pay off in full next month. I have the support team helping and ill post the solution once Ive worked it out with them.

      Reply Like
  • nolesrule  Thanks for the response.  I *think* I understand where I went off path.  I went through a "start fresh" exercise about two weeks ago and that is where thinks went wonky.  My guess is when I did that, I didn't (correctly?) put money in the "credit card payment" category, to budget it like a category.  I assumed since I'd already allocated money in the specific categories in the prior month, that I was covered.  I think I understand now that when I started fresh, and I started allocating money to different budgets, I needed to allocate the current balance amount (plus pending transactions) to the credit card payment budget.  

     

    Also, even though it hasn't bitten me yet, reading this thread answered the question I always had "where should I put funds from a returned item?"  In the past I would put it in TBB, but now I realize it should go to the fund that was originally taken out of.

    Reply Like 1
      • WordTenor
      • Arranged the menu, the venue, the seating.
      • WordTenor
      • 1 yr ago
      • 2
      • Reported - view

       Alice Blue Griffin Sounds like you've got it. The list of reasons nolesrule posted will tell you why the categories diverge, but in the grand scheme of things, if they have divereged, you fix it by changing the budget. Why they diverged is only important in as far as figuring out how to avoid the problem in the future. 

      Reply Like 2
  • So I am a new YNAB user, and I am also having trouble understanding how to make the credit card account work out right.  I totally understand how you have designed the system to work well for folks who pay their credit card off every month, and I would love that feature when I finally get there.  But I am not that person.  I am a person who is trying to pay my credit card off bit by bit, but who sometimes needs to use my credit card to make up a shortfall in my cash on hand budget.  For the life of me, I cannot figure out how to make the entries so that my credit card balance and bank balance are accurate, and yet there is not money showing in my budget that is not there. Help!

    Reply Like
    • Salmon Harp Make sure your CC's starting balance is logged and correct from the beginning. If it isn't then you'll have trouble and may just want to start a brand new budget. Also make sure you didnt overspend in previous months.  If you're carrying debt and are trying to "chip" away it, then budget that amount in the budgeted column. 

      If youre paying it off in full and you don't carry a balance, then you will always leave the budgeted column at 0.  

      If you enter the next month and have yet to make your payment, thats ok. Thats what the "available" amount is. If you're budgeting correctly, it should match your actual cards balance. 

       

      I sent YNAB an email and they sent a personalized video back - i watched it a few times and finally, it clicked! 

      Reply Like 1
      • WordTenor
      • Arranged the menu, the venue, the seating.
      • WordTenor
      • 1 yr ago
      • 1
      • Reported - view

      Salmon Harp  The system is actually designed for you.  It’s actually quite a bit more fiddly for people who pay their cards in full. 

       Here’s what you do: 

      1.  Budget your money for what you need to do before you get paid again.  

      2.  Spend according to your category balances. Don’t use your credit card;  if you’re carrying a balance, anything that you charge begins collecting interest right away.  Even if you get rewards, they won’t outstrip the cost of the interest.

      3.  If for some reason you need to take on more debt, which should be avoided,  then use your credit card and leave the category overspent.  It will turn yellow to show that the overspending happened on a  credit card. Don’t leave any red overspending in your budget, and try not to have any yellow overspending either. 

      3.  Each month budget some money to your credit card category.  At a minimum, you’ll need to budget for that months minimum payment, but you’ll also want to add whatever you’re using to pay the card down.  You can set goals to help you figure out how much to budget to reach a particular payoff date, but those are secondary and not necessary to use. 

      4.  When it is time to pay the card, look at the amount that is in the available column for the credit card category, and pay exactly that amount and no more.

      5.  Repeat each month until your card is paid off. 

      Reply Like 1
  • OK, so that yellow number is key to understanding it better.  I did the entry for my credit cards, and all of the balances are now correct.  However, I am not sure I understand how to apply a payment when I pay the next one:

    1.  I have a Credit Cards line item that shows an amount in black in the Available column, and I can see that this is the sum of items that are showing in green on the line items for each credit card.  It makes sense that those moved automatically out of budget lines where I had budgeted for things that went on the credit card.

    2.  I have two line items in my budget for credit card interest that are currently in yellow (statements just closed).

    3. I have a couple of line items in my budget for categories that were overspent on my credit card because I was short in my cash budget. They are showing in yellow.

    When I make my credit card payment, I know it has to cover the minimum payment, and hopefully a little more, but some of the things it covers are in different places.  When the payment doesn't ask for a category, how do things like the interest line items get neutralized?


    Thanks for helping me understand this.  I can see where it will be helpful if I can get the hang of it.

    Reply Like
  • Actually, I think I just figured it out, using a home equity line of credit account we have.  It looks like if I budget my credit card payment to the credit card account, and then transfer the interest amount out of it to the interest category, then everything works out right.

    Reply Like
      • WordTenor
      • Arranged the menu, the venue, the seating.
      • WordTenor
      • 1 yr ago
      • 1
      • Reported - view

      Salmon Harp You can choose whether you move money out for interest or not. The math is exactly the same; it’s just that you’ll not see the yellow overspending for the interest. For example, pretend you have $200 to pay the card and you’ve been charged $50 interest. You have three options:

      1. Budget $200 to card. Card available is $200. Interest is -$50. 

      2. Budget $150. Card available is $150. Budget $50 to interest. Card available becomes $200. 

      3. Budget $200 to card. Card availablen is $200. WAM $50 to interest. Card budget becomes $150, interest budget becomes $50, card available stays $200. 

      In every single scenario, the amount you have reserved to pay the card is the same, so choose whichever makes you happiest. 

      Reply Like 1
      • WordTenor
      • Arranged the menu, the venue, the seating.
      • WordTenor
      • 1 yr ago
      • Reported - view

      In short, check the payment category before you make a payment. Pay no more than is in that category. 

      Reply Like
  • The bottom line on credit cards is it is just too confusing. I hate the way it works -- too much happens behind the scenes. I use my credit card when I don't have money. I don't budget for it. I know that is not how it is supposed to work, but when I need groceries, I need groceries. I waste so much time trying to straighten it out in YNAB each month. I wish they would come up with a simpler way to deal with credit cards.

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

      Maroon Commander In your situation it is kinda straight forward. If you have $0 in your grocery category and you buy groceries on your card, you just enter the transaction from the credit card account and categorize to groceries. The grocery category available column on the right will now be (for example) -$25. Okay, say before the end of the month you receive $25. Enter it as Inflow: TBB and then assign it to groceries. All good. YNAB will then reallocate it to the credit card payment category and Grocery available will be $0 and Credit Card Payment available will be $25. Let's say the month rolls over before you receive $25. YNAB will revert Groceries to 0 in the new month and put the negative amount in the Credit Card payment category. When you get $25, assign it to the credit card payment category.

      Reply Like
    • jenmas I think where the problem lies is that some credit card charges are meant to be paid off in one month and others are more long term items that I want to pay off over several months. YNAB mixes those all together so I don't easily know what to pay. The orange color bothers me and I am always trying to eliminate it by moving money here and there. I just wish it was all out in the open rather than behind the scenes.

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

      Maroon Commander if you assign the amount you want to pay off directly to the credit card payment category in the month(s) after you incur a charge (in the month that you incur the charge, assign funds to the spending category itself to eliminate negative balances), it doesn't matter if you are paying off the groceries or the refrigerator that stores the groceries as the payment is lowering your credit card balance.

      Reply Like 1
    • jenmas "(in the month that you incur the charge, assign funds to the spending category itself to eliminate negative balances)" -- doesn't this just make the number of available "to be budgeted" money turn red and go negative?

      Reply Like
    • Maroon Commander I think it would be easier to understand, if when you click on the "activity" in the credit card payment category, the window that pops up was 1) wider so you could read what's in the columns, 2) longer so you wouldn't have to scroll and 3) if it told you which items were budgeted and which ones were not budgeted, so you could see what is going on more clearly.

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

      Maroon Commander I'm talking about new funds. Say you bought a fridge and you were $500 short in your appliance category at the time and you win $50 at bingo two weeks later. You add it to your budget as income, inflow TBB. You now have to assign that $50 somewhere. If it is in the same month that you bought the fridge, assign it to the appliance category so it is only negative by $450 and YNAB will automatically increase the amount in the credit card payment category by $50. If it is the next month, assign that $50 directly to the credit card payment category. Also, never pay more than what is available in the Credit Card Payment category - that number tells you how much in your budget is allocated to send to the credit card company. If you send a penny more than that number, you must reduce some other category by the same amount.

      Reply Like
    • Maroon Commander I ended up with redefining my card as debit, and all the magic is gone for good.

      Reply Like 1
      • Ben
      • Toolkit for YNAB Designer & Developer
      • furiousfalcon
      • 1 yr ago
      • 1
      • Reported - view

      Andriy Kvasnytsya That approach really only works if you are consistently budgeting for all purchases and paying off your credit card in full. If you're purposely carrying debt, or need to temporarily carry debt for whatever reason, that situation gets a lot more tricky.

      Reply Like 1
    • Andriy Kvasnytsya Good idea--I may try that! My YNAB budget is too complicated as I have a tiny side business in there, 2 checking accounts, 2 credit cards, and a savings account and about 70 categories (if they had classes like Quicken does, it would work better for me as I wouldn't need so many categories). I just can't keep track of the behind-the-scenes credit card money moving around. 

      Reply Like 1
    • Ben yes, I understand it. But problem is that there are too much of implicit and not obvious logic with credit cards... This whole branch, or even forum section proves it. I prefer to have plain old double entry accounting and have clear understanding where goes what. I'm paying in full, but if I can handle three currencies in my budget without any support from you, I think I can handle a credit card debt too.

      Reply Like 2
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