How to reflect Amex Plan It feature?

So I somewhat impulsively made a $600 purchase, knowing I was not going to pay it off in one go. Instead, I used American Express’s Plan It feature to pay it off over the next 12 months at a fixed rate.  YNAB pulled the transaction in as a full -$602, so I was wondering how I’m supposed to categorize this transaction?  I already have a separate goal to meet my monthly $50 payment that is required for my new plan, so it doesn’t make sense to put it in that category because it will be “overspent” even though it actually isn't.  Also, my CC is set up for paying off the full balance.

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  • Silver Robot Hey there! If my understanding of AmEx's "Pay It/Plan It" feature correctly, then I assume the entirety of the initial purchase is still reflected in your overall AmEx balance owed - is that right? 

    If that's the case, I believe the simplest way to move forward here will be to: 

    • Categorize the purchase to the spending category it belongs in, letting that category have uncovered credit overspending. 
    • Budget directly to your AmEx's Credit Card Payment category for the monthly payments. If you want to leave that goal set on your budget category as a reminder, that could work! But ultimately, you'll want those $50 to land in your Credit Card Payment category every month. 

    Does that plan sound like it could work? Let me know if I'm not quite understanding the feature, and we can definitely keep digging into this! 

    • Rachel Thank you for taking the time to respond! Yes AMEX shows my full balance including the plan, however it also has an “adjusted balance” that considers the plan and only reflects the portion that is due that month, as well as other accrued balances.

      Currently, I’ve created a monthly $50 goal on the credit card payment category. I’ve also created a category/goal for the plan fee/interest (shows up as a separate charge). So I have everything in place for myself to budget towards paying it off. I guess I am just stuck on how the overspent category plays into this picture?

      If I put it in its corresponding category, but budget towards the CC payment, the category’s balance won’t change over time.

    • Silver Robot Thanks for that added clarity about how this looks in your online banking!

      You'll want to categorize the full $600 transaction to the budget category in which it belongs, whether or not you plan to set aside that full $600 in cash right now. You'll see the credit overspend alert there this month, and when the month rolls over the available amount in that category will reset to zero. 

      Once that happens, the transaction is represented by the debt created on the AmEx. Since you have a game plan for remembering to budget that extra $50/mo into your Credit Card Payment category, you should be all set to move forward from there (if I'm understanding this all correctly)! Of course, let us know what questions you still have!

  • The category is over spent.  You owe the full amount.  The fact that amex lets you pay it over time is just a matter of timing and interest.

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  • The truly YNAB way to handle this is to budget the $600 in the appropriate category. Make the transaction. $600 moves to your card payment category. You are not obligated to send that $600 to the card, but it is now reserved for that purpose. Each month, you'll send only what Amex asks for.

    Using a 0% loan to gain interest on money you already would've spent is a great strategy (within reason—I personally wouldn’t do it for $600 but would with say, a car). Using a 0% loan to try to pretend you didn't spend any money is a mind game that YNAB won’t let you play.

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