Classify credit card account as checking account

This is an idea I haven't thought through yet, but wondered if anyone else might have tried...

I am so tired of trying to understand YNAB's credit card handling & make adjustments that seem messy & complicated (e.g., getting a return both correctly accounted for as  a CC refund & having the $ assigned back to the right category).

I wondered if it would be easier if I simply set up my credit card  as a checking account instead of a credit card account?  I don't import transactions, so no concerns there.  It seems to me I could still track all my transactions, correctly categorize them, and simply pay off my bill at the end of each month as I currently do. 

Seems too easy to work, but wouldn't it?  Can anybody see any problems with this?

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  • If you are carrying credit card debt it can be a problem. If you are a 100% paid in full user (ie can you pay all of your credit card bills in full right this minute and not have to adjust any of your categories?) it's not a problem. You need to rename your existing credit card account something else. Then create a checking account with the credit card name. Then you select all the transactions in the old account and click on the edit menu. From there you select "move to account" and move them to the new checking account. After that you close (not delete) the credit card account.

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    • jenmas Hi there! I attempted to follow the method you outlined here, but ran into a problem: after disconnecting the credit card, setting it up as a new "checking account," and moving past transactions to the new "checking account" - when I went to import new transactions on that "checking account," it imported ALL my historical transactions again, so they were doubled in the system. Is there a fix for this?

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      • jenmas
      • jenmas
      • 11 mths ago
      • Reported - view

      Steel Blue Horse I do 100% manual entry so have no idea how to deal with direct import.

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  • Thanks for the quick reply, Jenmas.

    I have a couple of questions:

    DEBT:

    I pay my CC at the end of each month, &  pay whatever current total the CC company shows in my account online.  (So I'm paying the current total, not the statement total.)  However, I generally don't pay for pending items (things I know I've bought that aren't yet shown online), and I have an auto-transfer set up to pay the CC bill from my checking account, and I can only update the amount I want to pay up to the last 2 or 3 days of the month, so there is sometimes a charge that's shown in the account online that I haven't included payment for.  Is that close enough to  being a "100% paid in full user"  to not cause me problems with credit card "debt"?

    ADJUSTING CATEGORIES:

    When I buy something on my CC, I record it on the Account page, and then immediately check the Budget page to see if I need to cover any overspending (i.e., move $ from one category to another.)   If so, I make that adjustment immediately.

    Sound okay?

    Reply Like 1
  • I have implemented the cc masquerading as a chequing account methodology in my budget. I set up my paid-in-full credit cards as chequing accounts. How do I know how much to transfer to my cc account? From my cc statement and from the number displayed in my cc account on my YNAB list of accounts. So simple. Whether you pay the balance in full or the statement balance in full, it will not affect the budget screen or your budget categories.

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  • Thank you, HappyDance! 

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      • HappyDance
      • YNABing consistently since 2014
      • HappyDance
      • 1 yr ago
      • Reported - view

      Sea Green Sun (ccf0a561a083) 

      I should probably add that I know I can pay my cc balance in full whenever I like because...and this is the critical part....I never let a category stay overspent and I never let my TBB go overbudget.  Since there is no red on my budget screen, I am confident that paying my entire cc balance in full or the cc statement balance in full at any point in my month will not leave me short for my essentials or cause me cash flow timing issues.

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  • +1 for setting credit card accounts up as checking accounts.  Like you I struggled with how YNAB handles credit cards and was often frustrated.  Converting them to checking accounts will result in them working like YNAB 4 did with the added benefit of all over spending being red and under funding being yellow.

    Reply Like 1
  • Thank you all for your input.  I'll be changing my CC accounts to chkg acccounts today & am looking forward to no longer trying to follow YNAB's torturous CC handling!

    Reply Like 2
  • Just an update.  I changed my CC accounts to checking accounts (you can find instructions somewhere in the forum - as I remember, you set up a new chkg acct, transfer all the txs into it, and then delete the CC acct).  I did this a month ago and it's SO much easier I can't even imagine going back to using YNAB's CC scheme.  I have found NO downside to doing this!

    Reply Like 2
    • Sea Green Sun (ccf0a561a083) (and any others doing this) Hi - I'm getting ready to make this switch, and just FYI I do use the import function and i do pay off full balance each month.  A couple qs:

      - did you run into the issue of duplicate transactions after moving the transactions from the old CC account to the new "checking" account?  if so did you just delete one of each?

      - how do you categorize payments into the CC account (ie, for full balance at end of month) -- my sense is the payments should be deleted, since we are pretending this isn't a CC?

      - relatedly, does your new "checking" account always have a negative balance since there's no inflow (assuming you delete CC bill payments)?

      Thanks for any help anyone can provide.

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      • HappyDance
      • YNABing consistently since 2014
      • HappyDance
      • 8 mths ago
      • Reported - view

      Orange Vacuum 

      No. You don't delete your payments.  The transfers from your chequing account to your cc account (which you've told YNAB is another chequing account), will continue to be just that - transfers.  Just as transfers from chequing to savings appear in both registers as transfers.

      The credit card payment category on the budget screen will disappear.  If you budget for all transactions before you spend, then you don't need YNAB to tell you how much you can transfer to your credit card.  Because all your cc purchases are always backed by cash in your accounts before the purchase, that means you are always in a position to pay the entire statement or balance on the card at any time.

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  • If I change my credit card to checking, will it still import transactions from my bank if I connect it to the right account? Has anyone tried this?
    (Long time YNAB4 user trying to transition to nYNAB and after several painful days I'm wondering why I'm still trying.)

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      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 1 yr ago
      • Reported - view

      Alice Blue Piccolo Yes, it will.

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    • nolesrule  Thanks for your super fast answer!  I'll give it a try.

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  • Will this still work if I'm carrying a CC balance?  I'm also having trouble figuring out how the CC's work.  Everything else is right on, I love the visual input of where the money is.  YNAB is going to get me back on track.

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      • HappyDance
      • YNABing consistently since 2014
      • HappyDance
      • 1 yr ago
      • 1
      • Reported - view

      Ivory Dragon 

      No. Not without creating an even more complicated work around to figure out how much debt you are carrying and how much you are paying towards retiring the old balance.  The best tool for paying down an old cc debt is the YNAB cc payment tool.

      Reply Like 1
  • Why not simply create categories for each of your credit cards, create a monthly spending goal as the amount you plan on paying down. Track the balances on your own as often as you need to.

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      • Ben
      • Toolkit for YNAB Designer & Developer
      • furiousfalcon
      • 8 mths ago
      • Reported - view

      Shawn That works for credit card debt, but it gets tricker if you have credit card debt but are actively using the card at the same time.

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  • I also did this. Otherwise I would have left YNAB as the info they show for credit cards in the budget is totally useless and never what you actually want to see, and they try to tell you when you last paid, and with a new account it's totally off. And there were so many other problems.

    Checking Account saved YNAB for me.

    Reply Like 3
  • Thank you for this thread.  It took out all of the confusion that Credit Cards create for those who pay off in full each month. 

    One question for everyone out there, how do you make sure that you have enough in your checking each month? My problem right now is I actually have a lot of my money in my checking account (this month and part of next month's expenses).  I'd like to move some of it into a higher yield money market account, but I'm not sure how much i can move and how to make sure I don't overdraft from my checking.

    It's because of this reason above, I haven't added my other checking and savings accounts which I do not use for monthly payments.  I think adding them they would help me towards budgeting for the future though.

    Any advice is appreciated!

    Reply Like 3
      • HappyDance
      • YNABing consistently since 2014
      • HappyDance
      • 2 mths ago
      • 1
      • Reported - view

      Slate Blue Unicorn 

      That's a cash flow timing question.  My process is this:

      At the end of each month/beginning of the next month, as I'm setting my budget for the new month, and after my salary is deposited, I ensure I leave the following amount in chequing:

      • my average monthly spend (from YNAB income/expense reports), +
      • any big irregular expenses scheduled/planned in the next 4 to 6 weeks, +
      • $1,000 (my preferred minimum account balance for flexibility).

      Last year, I made an impulse decision to buy a yearly gym membership, and that was the only time I had to transfer from savings back to chequing.  The rest of the time I could see what was coming well enough to decide whether or not to bother transferring to savings. Usually, I transfer whatever is in excess of the formula above.

      Reply Like 1
  • Entering a Credit Card as checking account really is the easiest way to manage the account. The operate the same way except the money stays in your checking account a bit longer. The advantage are the protections of a credit card and also rewards you can get. 

     

    Let me explain. 

    You budget $100 for a purchase in your checking account. 

    You can either spend the budgeted money by check , by debit card , by cash, or on your credit card. 

    If you go the credit card way, then $100 is charged to your credit card. The money to pay it is sitting in your checking account until the monthly automatic payment hits. 

    $100 is move from checking to the credit card, and you accounts are all balanced. 

     

    If you are like me , you get a 2% higher cash back reward for using the credit card. I usually count that money as income in YNAB, though sometimes I'll categorize it another category to offset spending. 

     

    If you are adding a new account, then select "checking" for the account type when you are adding it. 

    If you are switching an exiting account from credit to checking, 

    Unlink the credit card account

    rename the credit card account to   <name>-old 

    add the credit card account like I explained above, as a checking account. 

    Move the transactions from the -old account to the new checking ( grin ) account . 

    Move scheduled transactions, if any, to the new account. 

    Done!

     

    YNAB has a very complicated system for handling credit card accounts, it's best to avoid it unless you like high blood pressure. 

    Reply Like 1
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