"Credit" balance on CC, from expense before YNAB

Hi Guys -- I adopted ynab on May 1, 2020 about a week before I was able to use one time money to pay off my CC. After many false starts I am determined to make it work...

One of the transactions on my card balance was a deposit for a party for my husbands 40th birthday that I had paid way back in October 2019. 

I don't have a budget category for the party because COVID cancelled the party (back in March). So I got from the forums that I'm to treat this just like a debit card, and use it like to be budgeted. But I am scared to do this because when the card issues me a refund check, won't that money suddenly disappear from TBB? I don't want to budget, and have to then un-budget and then rebudget when I deposit the check from my credit card company. So should I just ignore it for the moment?

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  • Don't worry, Magenta Drill !

    When you make the transfer from your (positive-balance) credit card to your checking account, it won't affect your budget at all. Your To be Budgeted will stay the same and so will all of your categories. As far as YNAB is concerned, it's just money shuffling around between your bank accounts. Nothing to see here.

    That's quite different from what happens when you take a cash advance from a credit card—meaning the transfer leaves the credit card with a negative balance. But in this case, it'll be easy. Budget down to zero, and go ahead and enter the transfer as soon as you deposit the check.

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  • Categorize the inflow as TBB. In general, refunds should be categorized to the original category, and in this case that's the starting balance transaction.

    If this refund makes the YNAB account balance positive, then yes this is effectively just another checking account. If you elect to have the CC send you a check, you would record that as a transfer between CC and checking, which would not impact TBB. (Just as transferring from savings to checking doesn't impact TBB.)

    So no, don't ignore it. Budget TBB to $0. And use the CC to make budgeted purchases. I wouldn't bother with a refund check -- you may even get the account back to "normal" (negative) before the check would have even arrived in the mail.

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