Credit Card Budgeting

I'm trying to figure out the best way to budget with a credit card. First off, I have Discover and I know that YNAB is having issues linking accounts. I use my credit card like a debit card, so every time I make a purchase like a dress for $100 I took it out of the clothing category. But at the end of the month, when I make a $400 payment on my credit card... I don't know how to account for it. 

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  • A payment to a credit card is a transfer from your on budget checking account to your on budget credit card account and should be entered that way in the account register (I personally initiate the payment from the checking account, but you could do it either way). Transfers between two on budget accounts do not require a category. If you are in your checking account, in the Payee field you start typing To/From and pick from the drop down. Same if you are initiating from your credit card account, but you also have the option of just clicking the Record Payment button at the top of the register (next to the import register).

    NB: As far as your budget is concerned, the only money you have available to pay your credit card is the amount in the available column of the Credit Card Payment category for that particular card. If you are continuously making charges for budgeted purchases on your card and you are not carrying credit card debt, it is highly likely that the amount in the available column is higher than the statement balance on your card so it is up to you if you wish to pay the statement balance (my preference) or pay the account balance down to 0. Someone who does not carry any credit card debt has an available amount in the credit card payment category that exactly matches the working balance of their credit card as listed on the left hand side under accounts (except the available balance is positive and the account balance is negative).

    If you are carrying credit card debt, you should pay at least the minimum amount due but still no more than is available.

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  • Steel Blue Mare said:
    every time I make a purchase like a dress for $100 I took it out of the clothing category

    When you record this $100 outflow transaction in the CC account register, YNAB automatically moves money from Clothing to the CC Payment category. Do not do this again yourself.

    For a CC with paid-in-full status (i.e., used as a debit card), the CC Payment category Available amount should cover the entire working account balance. (That Available amount is also shown in the CC register as "Payment".) If that's not the case, then move funds from elsewhere to make it as such.

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