Can you help a newbie out with credit card questions?

So I am switching over all my budgeting to YNAB.  I have budgeted for years with the Free EveryDollar.  How I have done my budget in the past was I would just input all my receipts for the month when they happened, and would pay off the statement every month.  Since the statement is behind the actual month, I have always had at least a month extra in my bank account. So now I am trying to figure out how to straighten out my credit cards in YNAB. Should I just pay off the entire balance and not just pay the statement balance?  Will that straighten it out or will it mess me up? Then I just adjust since the amounts don't line up so I can start fresh?


Thanks for your help!

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  • Paying the statement balance is fine.

    What you have to do when you start the budget is manually budget money to cover the balance on your credit cards, since that spending happened before you started your YNAB budget. After that budgeted spending on a credit card will automatically move the money in your budget to cover the payments.

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  • Paid-in-full status means you have money reserved (available) in the CC Payment category to cover the entire debt -- synonymous with account balance. Most people just pay what the CC has asked for (i.e., the statement balance) and let the remaining funds in the category go towards the following month's payment.

  • Yes to  nolesrule and dakinemaui ,  but what it will look like in your first months budget is that you have drained your checking account of that extra month's money (since you have budgeted the entire starting balance of your card(s)). The Payment Available amount will equal your card's account balance but you can continue paying just your statement balance, while knowing that you actually have the funds budgeted to pay the entire balance.

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    • Periwinkle Flute Right, you've merely kept that much money away from being planned to spend (or actually spent) elsewhere. 

      Why keep the excess reserved when all you need is about half that much to handle the statement balance (assuming consistent usage)? Margin. Having only enough to cover the statement balance means you are one step away from incurring interest, and you MUST continue using that card. They also have the ability to switch to riding the CC float if the need arises -- an interest-free loan for whatever you can consistently make in budgeted purchases on the CC each month.

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