Credit Cards

This makes no sense to me.  How am I supposed to "think" about credit card payments for items differently and see them in a report?

When I look at "cash spent" on "van repairs" it reports $0.00.  I actually spent the money on a credit card to pay for it, and then I'm paying back my credit card, tagging it as a "van repair".  

 

The confusing part here is that the Report shows $0.00 spent towards van repairs.

 

Please guide me to a good video which explains the relationship between paying off credit card debt and how it relates to reporting about the payback of that money.

 

Thanks.

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  • You are not entering your transactions correctly. When you put the charge on your card you enter it in your credit card account register  as a transaction with the Payee as the name of the repair shop and the category as Van Repairs. When you pay the credit card it is a transfer from your checking account to your credit card account with no category. A transfer looks like this:

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  • Note that if you're using direct import, which I am assuming you are because your payee for the repair is "Online Payment ...." instead of "Acme Mechanic," the transactions to pay the card will show up as regular transactions. This is because from your bank's perspective, all that happened was money went out of checking, and money came in to the credit card. It has no way of knowing that these two transactions have anything to do with one another. 

    You can fix it by changing the payee as @jenmas  points out above. In the future, at least once, you need to manually input the transfer (note that best practice is to manually input all transactions) before it imports so that YNAB will learn that "Citi Card Payment XXXXX" is actually Payee "To/From:  Citibank CC" 

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  • Also you ask how you are supposed to "think" about credit card payments, and this is how you are to think about them: 

    Your credit card is just like any other account. It happens to be an account which is permitted to have a large negative balance. When you spend using the card, you are spending some of your total on-hand money, and your overall amount goes down. The credit card company requires that periodically, you transfer some of your money from one account to another to make them happy, but this actually has no effect on your total cash on hand, just like transferring between two accounts with positive amounts would have no effect on the total cash on hand. -400 (credit) + 1000 (checking)  = 600, just as 0 (credit after payment) + 600 (checking after payment) = 600. 

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  • Cyan Wizard said:
    How am I supposed to "think" about credit card payments for items differently and see them in a report?

    You're not. The spending happened when you swiped the card. Making the CC payment is just shifting money around.

    With a checking account, you deposit money before the outflow. With a CC account, you are allowed to deposit money after the outflow. If you fail to deposit enough in a timely fashion, they impose a fee.

    Don't make things more complicated than they need to be. 😉

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