Need a Credit Card Expert: Positive Balance

I overpaid my credit card, and followed all the steps in the support article to get YNAB to reflect everything accurately (https://docs.youneedabudget.com/article/728-credit-cards-with-a-positive-balance).

 

Here's the problem:

The Ready to Assign Dollars (from the positive credit card balance) does not say that they are specific to that positive credit card. So, if I assign all the dollars to my Grocery category for example there is a caveat: I have to spend those dollars with that specific credit card.

This might be something that's easy to keep track of for a very small overpayment. But if I spread out the ready to assign dollars over a variety of categories, YNAB is lying to me.

I use multiple credit cards to take advantage of rewards, etc. If I use a different card to spend from categories where  YNAB tells me I have money, it's false. 

Help?

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  • Are you going to stop using that card? Unless you stop using that card, you'll spend something that uses up that positive balance. It doesn't really matter *what* you spend on that card, so it doesn't really matter in which category you assign the money from the positive balance.

    Just like it doesn't matter to your categories whether the dollars for a particular job are in your checking or savings account. A positive balance on the credit card is the same thing, because category money is account agnostic.

    Like 1
    • Fuzzball Meows The problem is that I'm either forced to use only that card until the positive balance is used up, or assign all of those dollars to one category and only use that card for that specific category. I use separate cards for gas, groceries, travel, etc. This is normally not an issue because Ready to Assign dollars primarily come from my checking account, and when I pay those respective cards the payment comes from the checking account. 

      If I were to continue my normal spending patterns, I'm going to run into a situation where I've over spent. I cannot pay off one credit card with another. I can't access that positive balance on the credit card like I can in a checking account.

      This is a serious limitation to the YNAB software; there should be some sort of marker that indicates some of those Ready to Assign dollars can only be accessed if using that specific credit card. 

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    • Navy Blue Case if you don't plan to use that card again, or not for a while, then just assign those dollars to the credit card category. That way, they're set aside for that card, and when you do use it, you can move the extra dollars back into the rest of your budget. 

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    • Fuzzball Meows I use three different credit cards on a daily basis, including the one with the positive balance. I'll experiment with assigning those dollars to the credit card category. 

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  • The easiest way to illustrate the problem is by doing this:

    Assume the following (I set this up to test it). 

    1. Checking account is $0.00 (for simplicity). 
    2. Credit Card A has $1000 positive Balance, and it shows up to Ready to Assign. 
    3. Assign $1000 to Groceries. 
    4. Spend $1000 on Groceries using Credit Card B. 
    5. Notice that $1000 will move from Groceries to the Credit Card B Payment Category (SCARY!)
    6. Pay off Credit Card B using the Checking Account; you just overdrew your account.

    Now obviously, you would never do that in THIS scenario, but imagine a real scenario where there is money in the checking account, and ready to assign dollars were split into multiple categories. How do you normally know how much to pay on your credit card? You check the credit card payment category because you can trust it! But when dealing with positive credit card balances, you would not be able to trust the YNAB software to make spending decision. I used this example as the easiest way to demonstrate the problem. This illustrates a fatal flaw in the software. YNAB teaches us to use  spending categories to make decisions, NOT your checking account balance. The fact that YNAB treats a positive credit card balance as the same pool of money as your checking is scary. 

    Like 1
    • Navy Blue Case YNAB doesn't tell you to ignore account values. It does make you responsible for tracking them, though. That's why in every case where I've seen it talked about to use the categories to make spending decisions, it is outlined essentially as Step 1, check the category. Step 2, check your accounts to make sure the money is in the correct place. That would include "if I spend on card b instead of the card with the positive balance, will I be able to cover it from checking?"

      But that's why you have the option of moving the RTA into the credit card category. If you're running that close to the wire, that's probably the best option. Then again, if you're running that close to the wire, you should consider not over paying your card and possibly stop using so many cards. 

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    • Fuzzball Meows I'm not running close to the wire, but I used those values to illustrate a point that you can't simply follow YNAB's instructions for dealing with positive credit card balances. It leads to inaccurate data, and that's the frustrating part. Maybe I'm being too OCD about it, but I figured they'd have a more elegant solution for things like this. 

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    • Navy Blue Case Look up the word fungible.

      Like 2
    • Navy Blue Case it really doesn't lead to inaccurate data. You have those thousand dollars in your example. They can be spent on (essentially) anything you want/need them for. (Yes, I'm aware there are a limited number of things credit cards can't be used for.) You just have to make sure you're spending them from the correct account. 

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    • Fuzzball Meows Right, it's an extra layer of checking I guess I'm not used to.  In my case, I thought my auto payment had failed so I made a payment the same amount - I've been a YNAB user for years but this is the first time this has happened to me. 

       

      I noticed a bug while experimenting with how I wanted to treat my situation... From the YNAB site: "Because this account is now behaving like a cash account, when you make a purchase on a card with a positive balance, no money will move to the Credit Card Payment category. That’s because YNAB is smart enough to know you don’t have to pay back that spending on the card."

      That statement above is in accurate. Money does in fact move to the credit card payment category. Easy fix by removing the money moved to the credit card payment account, but a bug none the less. 

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      • nolesrule
      • Stealing From the Future fix is an improvement but is incomplete....
      • nolesrule
      • 8 days ago
      • 2
      • Reported - view

      Navy Blue Case YNAB will not move money from a spending category tothe payment category while the credit card account balance is still positive. This is regardless of what number is showing in the payment category for the card. I just tried it (again) in a test budget.

      If you are so concerned about this issue, I suggest you ask the CC company to just refund you the extra payment. But everything that Fuzzball Meows has written is correct.

      Like 2
  • This is a great illustration of how YNAB views all of your cash as one pool. If you have $50 in checking and $100 in savings, and then go to the grocery store and spend $150 using your card, you'll overdraw your account. Keeping an eye on account balances is necessary if a transaction will bring you close to $0.

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