Rewards and Payment

I have two issues.

The first is that I put a credit cash reward as TBB in my credit card and the amount in inflow. That amount doesn't appear in my TBB.

The second is that I pay my credit card daily (yes, daily). As soon as purchases clear, I pay them. The amount in my budget in the payment column is much higher than what I actually owe on my credit card. It is also higher than my working balance in the budget (about twice as much). So, I am trying to figure out if I am doing something wrong.

I always put my new transactions from my receipts into the credit card account before they have cleared. 

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  • Do you have a balanced owed on your credit card?

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    • Khaki Pegasus I do, but last time I did this, I saw the TBB category increase by the amount of the reward.

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    • Turquoise Device   My experience has been if you are in the red on the credit card it will act as an inflow to the credit card, paying down your debt. If you are not in the red on the credit card it will appear as inflow in TBB. 

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    • Khaki Pegasus It is true that the debt reduces, but now there is an extra amount of money in the budget that didn't exist before. That has to be assigned somewhere. It doesn't change the amount of money in the available column of the budget for the credit card and it doesn't go to TBB. It might reduce the amount owed on the credit card, but the inflow has to be budgeted somewhere. 

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    • Khaki Pegasus You were correct. When I did this before, my balance was 0. That is why the behavior was different.

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  • On your second question:

    Your payment amount is probably much higher because all transactions haven’t cleared yet. So you are entering charges each day. But sometimes it can take 2-3 days for them to clear. But the payment will show all all the transactions added together whether they are cleared or not. When you are paying for your credit card daily, you are only paying for the ones that have cleared up to the day you are paying. 

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    • Jeff Reetz Agreed. However, based on what I have seen in the forums, the working balance and the amount in the available column should be the same. The amount I have in the available column is almost twice what the working balance is. All my credit card transactions are recorded. I am moving into my third month of YNAB. In both January and February, I had a positive value in the activity column. Seems odd.

      In addition, after I submitted this question last night, I noticed that although TBB is 0, if I put a 1000 in the budgeted column for a category, TBB stayed at 0 and did not go into the red. However, if I put 100000 in a column, it would go in the red for only 90000+. There is no way that should happen.

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  • I have the same issue! I just faced it couple min ago. 

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    • nolesrule Yep. That was the problem. We figured it out last night. Thank you.🙂

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  • Your available should never be higher than your working balance. It should be equal at best.  When it's different, adjust the payment category.

    Is there a reason you pay the card every week? Seems unnecessary, and may be part of the problem you are having, particularly with CC reward timing.

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  • I figured out the issue. It was related to reward payments and payment timing. I know how to avoid this moving forward. I pay the credit card daily. I pay it daily to keep my balance low in order to avoid hits to my credit rating. My credit rating is 811. I am working to hit 850. 

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      • nolesrule
      • Stealing From the Future fix is an improvement but is incomplete....
      • nolesrule
      • 3 yrs ago
      • 1
      • Reported - view

      Turquoise Device Your credit card balance is only reported to credit bureaus once a month. You only need to bring it to zero, if that's what you want to do, by paying off the full balance right before the statement closes.

      I'm not sure why 850 is your goal though. You don't need to be higher than 720 to 760 depending on what type of credit you are applying for. It's almost impossible to achieve an 850 credit score.

      We only pay our statement balance every month on or slightly before the due date, with the new purchases during a statement period getting reported every month. Our credit rating hovers between 810 and 820 depending on whether we had a low or high spending month. We've never had any credit issues.

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  • Credit card bureaus also scan during the month for utilization to see the difference between total available credit and the amount used. My credit score will dip in a month when the utilization is too high. It is probably impossible to achieve an 850. It wouldn't provide me with any additional benefit if I did. But, most people who climb a mountain don't do it because it is necessary. They do it for the accomplishment. This is my  Kilimanjaro :). Thank you for answering my YNAB questions. I appreciate it.

    For reference: https://www.creditkarma.com/credit-cards/i/credit-card-utilization-and-your-credit-score

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      • nolesrule
      • Stealing From the Future fix is an improvement but is incomplete....
      • nolesrule
      • 3 yrs ago
      • Reported - view

      Turquoise Device That link doesn't contradict what I wrote, and in fact it contradicts itself. It says to make payments more frequently to improve your score, while in the same bullet point saying that the balance is only reported once a month.

      And in my 20+ years of monitoring my credit, the balance reported is always the statement balance, it's reported once a month, and it shows up on the report a few days after the statement date.

      Credit bureaus don't scan your accounts. They only collect data that is reported to them from credit sources.

      My point was that making payments on a daily or weekly frequency is extra unnecessary effort that could be focused elsewhere. Me, I opt for auto-pay of the statement balance on the cards that have an autopay option, and just manually schedule to pay the statement balance on those that don't. The interest I earn by keeping the money in my account longer, even though it's only an additional $5-10 per month,  is more valuable than both the effort to pay frequently or to play unnecessary games with the credit score. But YMMV.

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    • nolesrule Thank you for the insight and again for answering my original posts. Have a great weekend!

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      • nolesrule
      • Stealing From the Future fix is an improvement but is incomplete....
      • nolesrule
      • 3 yrs ago
      • 1
      • Reported - view

      Turquoise Device I will try. We lost a tree in the storm this afternoon, so we'll have to deal with that soon . Fortunately no damage. You have a great weekend too.

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