Credit Cards and YNAB is confusing

The way YNAB manages credit cards makes absolutely no sense to me...transactions are applied where the CC hasn't even been used....and when you DO use a CC, YNAB moves only a partial amount from the transaction category back to the activity column for the CC in the budget,...I don't get it.  If you buy an item for $100, and categorize it for a purchase where the budgeted amount is $50, shouldn't that $50 be moved to the CC budgeted amount, with an activity showing $100, and a -$50 showing up in 'available?'

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  • YNAB will only move $50 to the credit card payment category because that is all that was available to be allocated from the purchase category. The purchase category will have an available amount of -50. When you fix the overage in the purchase category, it will have the $50 to move to the credit card payment category. At the end of the month, the negative category will be zeroed out. The difference between your actual credit card balance and the amount in the credit card payment category is the amount of your credit card debt.

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  • The $50 does not move via “budgeted.” You see the movement in “activity” in the CC payment category. Everything else you said is exactly what happens.

    Don’t  spend a lot of time trying to understand the credit card payment category.  That is level two of understanding credit cards.  First, I understand how your budget categories work:  when you spend budgeted money it is moved to the credit card payment category.   If you spend more than is budgeted, that category will go overspent and only the amount that is budgeted will move. Just like any other category you can’t spend more on your credit card payment than there is in the category. 

    tl;dr stop overspending and it’s going to start to make more sense.  Once it makes sense, you can start to use overspending more strategically, if you so choose.

    • Voracious Reader
    • YNAB broke is not the absence of money, but rather the judgment that it has something more important to do.
    • Orange_Cheetah.3
    • 1 yr ago
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    To build a little on what jenmas said (I'm by no means a ynab expert, just an overthinker) I think of it this way: YNAB will offer advice through the rules, will show you information to help you make decisions, but it will NOT make them for you. If you told YNAB you had only 50 dollars to spend on Dining Out, and you used your card to pay 100 dollars to a restaurant, YNAB will not overrule you.

    Basically, YNAB pays you the courtesy of assuming you are an adult managing your money and that you had a reason for doing it that way.

    In my case, that's not always 100% true...there's plenty of thoughtless and unreasoned spending in my past, but I'm actively working on being intentional with it and I appreciate that YNAB does not get all judgey with me, but just tells me that, based upon how much money I said I had to dine out with, I am not going to be able to fully pay off my credit card. So I can reallocate money that I've budgeted to something else, or I can pay interest. 

    If one of my cousins from Israel/Utah/Alaska randomly shows up in town and asks me to dinner, or my BFF has a 3 hour stopover in a nearby city while she's flying coast to coast and I can take a train to see her, or my stepmother urgently needs me to run an errand for her that she can't run herself, or my sister-in-everything-but-blood loses her wallet in a strange city and needs me to book her a hotel room, or Thomas Jefferson comes back from the dead and wants me to take him to Bonefish Grill...none of these are things I knew about when I was budgeting, and I'm ABSOLUTELY willing to overspend, pay interest, have to dig my way out, whack some moles, or do whatever is necessary to Make It Happen. And YNAB will let me. 

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  • Kevin Bullerman said:
    If you buy an item for $100, and categorize it for a purchase where the budgeted amount is $50, shouldn't that $50 be moved to the CC budgeted amount, with an activity showing $100, and a -$50 showing up in 'available?'

    If the Available was only $50, that's exactly what happens. The budgeted is only the change in the category this month. It's the Available that actually matters for spending decisions.

  • Hi Kevin Bullerman !

    The explanations above are great, I just wanted to leave a few links to more resources! To learn more about how credit cards work in YNAB, take a look at our Quick Start Guide to Credit Cards and consider taking our Master Credit Cards with your Budget workshop!

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