Starting to use Credit Card

I want to start to use my credit card instead of my debit card to get more reward money back.  I will be paying off this credit card in full each month.  I have watched several videos on the subject and have a good understanding.  But, to get started cleanly, I plan to pay off this months credit card bill in full, and then enter a new credit card account in YNAB.  I know that the starting balance will be zero.  My question is, what do I enter for the budget.  I think I leave this blank since I will be starting with no balance.  Please advise.

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  • You only budget for your credit card if you are paying off a balance (this includes budgeted purchases that were made on the card before entering it in YNAB). If you have $100 available in groceries and you pay $25 with your card and enter it in your register as an expense from the credit card with category groceries, YNAB will move $25 from the available groceries (activity in the middle activity column causing the right available column to be reduced down to $75) into your Credit Card Payment Available amount for that account.

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  • Hi Bayou Buckeye !

    If your starting balance is zero, you won't need to budget for it (since it's zero).

    Since you plan to pay your credit card in full, you'll want to make sure your credit card category balance matches your credit card balance. If you owe $100 on your credit card, you'll need $100 Available in the credit card category to pay the card in full - as long as all of your credit card purchases are budgeted for, this will happen automatically. :)

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  • Hi there, I'm jumping into this thread because I'm having difficulty with this. I've entered my credit card  account and it's showing up in my Credit Card Payments category group. I manually enter transactions into the CC account as I make them, and the correct balance is showing at my CC account but not in the category at my budget. For example, right now there's a balance of $844 on my CC. I plan to make more purchases over the next few weeks and pay it in full before they charge interest.  The category in my budget lists $194.70 as budgeted, $119.16 as "activity," and $134.40 as available (???). 

    In my budget the corresponding categories have the right adjustments (for example, Medical went from $200 to $170 when I made a copay of $30 on my CC). But why isn't the total tab for the CC listed in the budget under Credit Card Payments category? Is this weird, or am I doing something wrong? I started YNAB last week and made some purchases in December, paid the card in full based on cleared transactions, but some transactions carried over from December.  Not sure if there's a setting that I've missed or if I'm not using it correctly.

    Sorry to barge into this thread, but it seemed to fit! :)

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      • bevocat
      • Crazy Cat Lady
      • bevocat
      • 2 wk ago
      • Reported - view

      Hot Pink Yeti The transactions that cleared your credit card after your statement cut but before you started using YNAB increased the amount due to your credit card beyond what is in the Available column in the credit card payment category, because you didn't tell YNAB about these transactions and assign them to categories.

      If you truly have enough to pay your credit card in full, I would recommend waiting a few days to let every transaction clear, look at the credit card's website and get your total new balance, reconcile the YNAB credit card account balance to that, and add whatever number is necessary to the Budgeted column to make the Available column match the credit card account balance.  If you can't do that, then you're not actually paid-in-full and you are at the very least riding the credit card float.  In that case, I believe you need to add whatever number is necessary to the Budgeted column to make the Available column at least match the amount you're sending to the credit card.

      I know it's confusing at first, but you'll get it.  I was riding the float for a year, and now that I'm totally paid-in-full, my Available column always matches my total credit card balance (unless I have cash back rewards, but don't open that can of worms yet!).

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    • bevocat  Thanks for the quick reply! I'm still struggling to make sense of it.  I had a balance of $2772 that I paid on Dec 28, and the credit card wouldn't let me pay beyond that amount to cover the pending transactions. Thus, I started January with a couple of transactions from December and then started using the CC for other purchases.

      I'm always ready to pay my CC in full, I just use it throughout the month for regular spending, earn the rewards, and pay it before they charge interest. Every time I spend, I manually enter any transactions at YNAB (account is not linked). Do I need to go back into the CC category and adjust the budget amount to reflect every new transaction? Shouldn't the system "automagically" do that for me when I add a transaction in the CC account? I'm still missing something, but hoping the fog will clear soon. :)

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      • bevocat
      • Crazy Cat Lady
      • bevocat
      • 2 wk ago
      • 1
      • Reported - view

      Hot Pink Yeti Right, you have to explicitly budget those transactions from December into the "Budgeted" column of your Credit Card Payment category.  The purchases you enter now, you'll assign categories to them, and those amounts will automatically leave their budgeted categories and go into the "Available" column of the Credit Card Payment category.  But the ones that were already "in flight" when you started YNAB, so to speak, didn't get captured and categorized that way.

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