Credit Card Help!
I have just started using YNAB and my credit card has R46,000 debt. I have budgeted to start bringing this debt balance down each month. I regularly pay for groceries, petrol etc. using this card. However at the start of the month I need to deposit R6000 groceries + R1300 petrol + R300 gifting + R15000 balance reduction into my card to be able to use my card (as my limit is R50 000). So I essentially need to deposit money into my account now to be able to spend and not just at the end of the month to pay off the balance.
I am getting mixed up with transactions - how does this work? How do I reflect the movement of the money into my credit card and out of my current account? How does this affect my spend in each of the categories?
Would love some help!
Hi Spring Green Pony !
You'll need to budget for the payment you plan to make towards your outstanding balance. Are you planning to make a total payment of R22,600? If so, you'll want to make sure you have at least that much Available in your credit card category (budget directly towards your credit card category to make up the difference).
Once you have the money available, enter the payment - this will be a transfer from your Checking account to your Credit Card account.
Credit card payments need to reflect the flow of cash in your accounts. In most cases, they’ll be entered as transfers (outflows from your checking account and inflows to your credit card account). There are two ways to set them up in your register—depending on whether you enter them or import them directly from your bank.
To record a credit card payment yourself:
- Click on the credit card account in the account list to view your Register.
- Click Record Payment.
- Select the date, the account the payment is coming from, enter a memo if you’d like, and (if needed) change the amount. By default, the inflow field is populated with the amount you have set aside for the Payment.
- Click Save and you’re done! The payment will be reflected in your Credit Card Payment category just as you’d expect. If you have your account set up for Direct Import and this payment imports later, it will automatically match with the one you entered. Easy peasy.
Going forward, as long as you budget for your spending on the credit card, YNAB will move the money for you. For instance, let's say you budget R300 for Dining Out. If you spend R300 on your credit card and categorize it as Dining Out, YNAB will move that R300 from your Dining Out category to your credit card category so those funds are Available to pay your credit card bill.
Let me know if you still have questions! :)