Credit Card usage

I have some conceptual issues (not sure this is the correct word) with Credit Card use in YNAB. This is not a technical problem.

Some background... my credit card is automatically debited from my bank account every month, the day 10. At that time all the charges that were done with the card from day 10 of the previous month to the day 10 of the current month are debited and the monthly balance of my credit card is reset to zero.


I'm starting this month with YNAB. In December I already have a Budget (Hooray!) for all my expenses.
But I know that on December 10th will be a debit in my bank account to pay the card. I'll do a transfer in YNAB to reflect this in the Bank balance and the CC balance.

Now, part of the expenses are from November, and part from December. This means that in January I will pay for all the expenses from December 11 to January 10.

I really not find a clear way to put all these data in YNAB... in order sort all the information correctly.

I feel confused because in December I need to take in account my November expenses...


Any help will be welcome!

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    • Ben
    • Toolkit for YNAB Designer & Developer
    • furiousfalcon
    • 2 yrs ago
    • 3
    • Reported - view

    Assuming you've added the credit card account, you should see a "Credit Card Payments" section at the very top of your budget, which will contain a row for the credit card. That "Payment" amount represents the amount assigned for paying off any balance on the card, and it's composed of any leftover amount from last month, this month's budgeted spending, and anything additional that you've budgeted towards the card in the Budgeted column.

    YNAB doesn't care about your exact credit card payment due date, or what transaction dates the payment is paying for. Really, the only thing it cares about is that when you go to make a payment, you have enough set aside in that column to cover the payment.

    As part of the startup process when you first start using YNAB, you'll want to budget additional money to the credit card to set aside money for pre-YNAB debt. You'll do that by adding money to the card's Budgeted column, ideally in the amount of the opening balance. You don't necessarily HAVE to budget this amount all at once, but any difference between the amount set aside for payment and your card balance represents debt you are carrying.  YNAB talks about this when you first added a credit card account, and there's usually a step in the card setup process where it suggests you set up a goal to budget for that initial debt.

    Ideally, assuming you regularly pay your card in full and budget for all your purchases, your Payment amount should always match up with the card balance. If you have a -$500 balance, you'd want to have +$500 available for payment.

    If not, that means there could be a couple factors at play: two common ones are that you haven't budgeted for past debt, or have overspending that you need to fix. Or, if you're just getting started, it could be that YNAB is showing you that you're "riding the credit card float" -- basically, spending this month's income on last month's purchases, and forever being in debt by one credit card statement. YNAB talks about that here:

    In your case, assuming you continue to only pay the statement balance and not the full balance, your Payment column isn't likely to ever be zero. It will roll over month to month, increasing as you make budgeted purchases and decreasing as you make payments. The only important thing is that it matches up with your card balance, indicating that you always have enough money set aside to pay it off in full if you choose.

    Like 3
  • Ben is spot on! If you have an outstanding balance on a credit card when you set it up in YNAB, and you plan to pay that in full, you’ll need to budget for it in the Credit Card Payments category. That’s what lets the budget know you plan to take some of the money you have and use it to pay off that existing balance. Here’s a video explaining how this works.

      • Ben
      • Toolkit for YNAB Designer & Developer
      • furiousfalcon
      • 2 yrs ago
      • 4
      • Reported - view

      April at YNAB Since this sort of question gets asked somewhat often (at least based on Reddit and the old YNAB forum), it sure would be nice if YNAB had a help article specifically on how to handle the initial debt... There's very little in the docs about this step in setting up a credit card. 

      Like 4
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 2 yrs ago
      • Reported - view

      I think for me learning about the credit card float was the biggest shocker when I started using YNAB. Over time we chipped away at it with credit card rewards and extra money we found in the budget. But since it was much smaller than our emergency fund we could have just re-purposed some of that in the budget and then replenished the emergency fund. The joys of mental accounting. :)

  • Thanks, Ben! your answer was excellent and everything is more clear now. Yes, I'm "riding the credit card float" but the inflow is enough this month to pay the CC debt in full.

    I created a dummy budget to test some different things and discovered the "goals"... Amazing idea!


    Thanks again!

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