Credit Card question: Available amount
Hi.
I use my credit card as a daily payment method (apple pay, supermarket etc.) and always pay it at full at the end of the month (thats an automatic process). It is also used at ATM cash mashines to get cash.
This month I had spent 456,60 € via CC payments and it was payed on the 22. december via transfer from my main account. Then I withdrew 50 € with the CC which I modelled in YNAB via a 50€ transfer from CC to my Wallet account.
So I budgeted 456,60 € + 50 € = 506,60 € for my CC. But my activity only shows 456,60 € and so YNAB thinks, I have 50 € left in the CC budget. Which I dont, because I transfered it to the wallet.
When I remove 50 € from the CC budget, it tells my that I need another 50 to stay on track. When I readd them, it tells me I have 50 available.
Why is that? I expect the available budget to be 0 € and not 50 €
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You still need to pay off that 50 pounds right?? What is the total balance due on the card? That’s the number you want in the available Bible if you are a paid in full user.
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satcook the CC has a Balance that is -50 € which need to be payed off (with and additional money from future spendings) at around 22. January
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You still have the 50 balance from the withdrawal, so it needs to be budgeted for in order to keep the pay in full status.
It did not appear in Activity because a transfer cash withdrawal is an uncategorized transaction, and only budgeted transactions from categories or payments and refunds will appear in Activity. For the same reason, the 50 will appear as overspending on the Credit Card register screen, even though you've budgeted to cover it.-
nolesrule I don’t understand tbh. I removed the money from the CC so it’s not supposed to be there anymore.
could you help me understand ?how should I handle this ?
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Cadet Blue Griffin this is what I gather from your post.
You paid the card so it had a zero balance. Then you withdrew 50 from the card so it had a -50 balance. Is this correct or not? -
Cadet Blue Griffin
Cadet Blue Griffin said:
the CC has a Balance that is -50 € which need to be payed off (with and additional money from future spendings) at around 22. JanuaryOkay, so yes, you need to budget to pay back that 50. YNAB does not treat a transfer from a CC to another account the same as a budgeted purchase, because this cash withdrawal is not backed by a budget category.
This is not considered Activity (it is not spending, payment or return), which is why it does not appear on the Activity pop-up.Instead, you have added 50 debt to your account while at the same time adding 50 to your cash (which YNAB adds to your TBB). You were correct to budget the 50 back to the category, because you need to pay it back to maintain the Pay In Full status.
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Cadet Blue Griffin YNAB does create some confusion for these "cash advance" situations, because they are different from the other types of transactions that happen on a credit card. But if you think of these transfers as the 2 steps outlined above (1. a purchase without a category, and 2. new cash in your budget) then it makes sense and it's easier to understand how to manage it.
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nolesrule hmm. But don’t you think that it’s wrong ? I don’t have 50€ available on the CC. But it shows them as available.
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Cadet Blue Griffin The category is a Credit card Payment category. it tells you how much money you have in your budget reserved for making credit card payments. Since you have a credit card balance of -50 you need to have 50 reserved to pay it back.
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nolesrule Thanks for the explanation. But I cannot grasp it. I don’t think it’s right. Let me try to explain with this example :
when I remove the 50€ it shows that I have 0 available. But it should be -50€ underfunded. But it isn’t.
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Cadet Blue Griffin He means your *account* balance is -50. You need the 50 in the payment category so you can pay the bill next month.
Think of it like, you're not going to spend the 50 in your wallet. And when your bill comes in you pay it with the 50 in your wallet. Of course, that's not literally what you're doing, you're spending the 50 on other stuff. But the CC still will want its money, so at some point you need that 50 euro reserved for the payment when the bill comes in.
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Cadet Blue Griffin
Cadet Blue Griffin said:
when I remove the 50€ it shows that I have 0 available. But it should be -50€ underfunded. But it isn’t.You said originally you had budgeted 50 to the category. At that point your Available for payment was 50. If you then remove the 50 that you budgeted, your Available goes down by 50, so it goes to ZERO.
But you still owe 50 on the card, so that's why you needed to leave the 50 in Available to stay on track.
As I stated earlier, you must budget money to the card in order to have money Available to pay back any charges on the card that did not originate as a categorized, budgeted purchase. -
Cadet Blue Griffin If you want this to make sense and you aren't grasping how the transfer affects your budget, I suggest that instead of using a transfer to move the money between the accounts, you use separate transactions. One as a categorized outflow and the other as an Inflow categorized to the same category as the outflow.
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nolesrule yeah I thought of that too. Still want to understand the concept.
i think I got it 80%. But I still don’t understand why it doesn’t tell me “underfunded -50€” when I remove the 50€ but tells me it’s even with 0€ (The cc is -50 in debt) -
Cadet Blue Griffin Can you provide screenshots of what you are describing?
Ifthe CC balance is -50 and the CC Payment Available is 0, it should tell you you are underfunded by 50. If the CC Payment Available is 50, then it should tell you that you are not underfunded.
If you are talking about the details in the inspector, ignore it. All that matters is what's in Available compared to the actual card balance. -
Cadet Blue Griffin Do you have a goal on the CC Payment category? If so, delete it. Alternatively, ignore the warning.
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dakinemaui it has the goal “pay off credit card monthly”. It is set up as a cc in YNAB
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nolesrule I now made the screenshots.
1. CC Daily transactions (it is set up as an CC account as "payed off monthly"
2. CC Daily with 506,60 budgeted (accounting for the 50 € cash withdrawal). It shows 50 available
3. It shows Current Balance "50" although it should be 0
4. I removed 50 € and it still shows 50 balance
5. January 2021 shows 0 budgeted although it should be -50
6. Screenshot of the -50 € balance on the CC account (which is correct) and the wallet (cash) account
The CC is used as a regular payment card (supermarket, gas station, etc) and for withdrawal. I always pay it full at around the 20-25. (automatic process by the bank) and it has no interest.
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This all looks correct.
In screenshot 1, you have €50 available to pay your €50 balance.
In screenshot 2, you have moved the €50 so it’s no longer available for the card, so you get a warning.
Screenshot 3 is January. When you get to January, it will assess and see you are €50 short. (I’m assuming. I hate the new date-dependent goals and mostly don’t use them)The credit card category is just like any other category. It tells you how much money you have set aside for that kind of spending. Just like lebensmittel tells you what you can afford to buy next to eat, the card category tells you how much you can afford to pay the card.
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WordTenor ok. I thought the cc category somehow uses a dynamic goal set to the current debt.
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Cadet Blue Griffin said:
5. January 2021 shows 0 budgeted although it should be -50The Budgeted column resets to 0 every month.
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Vibrant I understand that now. But still think this does not make sense. It should dynamically atone for the cc debt
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Cadet Blue Griffin said:
Still want to understand the concept.There's lots of ways to look at this, but here's one...
Ordinarily, when you pay with a CC, you take on debt and the CC gives the vendor money. When you get a cash advance and then pay with cash, you still take on debt and then you give the vendor the CC's money. You're just the middleman.
In the budget (assuming the spending category had sufficient funds), when paying with a CC, the spending category is decremented and the CC Payment category is increased automatically. When you're the middleman, the spending category is still decremented, but YNAB doesn't know the CC Payment category should increase. Therefore, you need to do it, so you might as well do it immediately upon withdrawal.
In case you're thinking that you're somehow short because of this, you must realize that TBB is increased during the cash advance. YNAB is giving you extra funds in the budget that you didn't have before, so you're not out anything if you put them toward the CC Payment category.
You'd probably find it helpful to make a few test transactions and see how the spending category, CC Payment category, and TBB change during the sequence.
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dakinemaui thanks for the explanation.
I think my misunderstanding resulted from how I use the CC. I don’t use it as a CC per se but just like another access to my checking account. So I want the money I used with the CC deducted immediately -
Cadet Blue Griffin The spending category is reduced immediately. You still have the same amount of cash, though, so it has to go somewhere -- the budget funds ALWAYS matches the cash in accounts.
If you want to sweep this bit of reality under the rug for a paid-in-full CC, you need to use a checking account type to represent it. With this representation, funds to pay the CC in full are always and implicitly reserved. To switch, make a "payment" from a new account (a.k.a., a balance transfer), then close the old account after ensuring the CC Payment category Available is $0.
If you ever need to finance something or ride the CC float, you would need to balance transfer back until PIF status was restored.
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