Available amount on Credit Cards

Hi,

I’m really not understanding how to think about the available amount on the credit card account. 

Can someone explain how to think about these screenshots?

Given these amounts, to the best of my understanding, the $103 available is what I should pay on the credit card? 

What exactly is “available?”

Best I can understand it: in this case $103 is what I need to pay to cover the interest expense as well as meeting my goal of paying $150  

So for this month because of the interest, I need to pay $203 to reach my goal. 
 

Am I getting this right?

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  • The Available Amount is how much of your budgeted funds is currently allocated to pay your credit card bill. Just like the available amount in your Grocery category is how much of your budget is currently allocated to buy groceries. If you want to pay more, you should allocate more to the credit card payment category.

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  • Just like any other category, the CC Payment category's available amount shows you how much you can send for that category's purpose (in this case, paying your CC).

    • You budgeted $150.
    • You sent a $99 payment to the card.
    • You spent $52.14 on interest (I think your screenshot indicates it was budgeted in the interest category, but correct me if I'm wrong), which was then added to your available amount.

    So far, we have 150 (budgeted) -99 (payment) =51 (available), which would have been the available after the payment.
    Then, 52.14 (budgeted spending/interest in this case) + 51 (previous available) =103.14 is the remaining available amount. 

    The reason your activity is -$46.86 is because the 52.14-99 was grouped together there.

    *Edited because I got the timeline backwards, sorry.

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  • Blue Sander said:
    Best I can understand it: in this case $103 is what I need to pay to cover the interest expense as well as meeting my goal of paying $150  
    So for this month because of the interest, I need to pay $203 to reach my goal.

     Essentially, yes.  Good job figuring that out!

    If you don't want to do it that way, let us know and we can point you in the right direction.

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  • Wow. Thanks for quick replies. 

    I guess what is confusing is that I am paying one vendor from two budgets by splitting the interest out.

    What I didn’t think about, and what’s not in the screenshots is that I allocated money to the interest category, which is actually adding to my credit card budget for that account. 
    That’s a bit counter intuitive, but I think its good actually. I like being forced to think about the interest as separate from paying down the principal. I feel like there’s a way to make this a bit more clear in the app, perhaps by nesting interest automatically in the credit card group. 
    Or I guess I can make a category for each credit card’s interest and just think of that as part of the credit card budget. 
    I think I get it now. Thanks. 
     

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      • nolesrule
      • Been waiting 5 years for the Stealing From the Future fix...
      • nolesrule
      • 3 mths ago
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      • Reported - view

      Blue Sander The interest is no different than any other charge to the account. YNAB is designed to support regular spending on the credit card whether you carry a balance or not. Any category you budget for and then spend on a credit card will allocate that money toward paying back the credit card once the spending happens.

      As dakinemaui likes to point out, credit card interest is a purchase where you are buying time rather than a thing.

      Like 1
      • WordTenor
      • Can we agree that goals are dumb and immature? Sure.
      • WordTenor
      • 3 mths ago
      • 1
      • Reported - view

      Blue Sander to specifically address the cognitive dissonance of “one vendor from two categories (not budgets)” part of your question: you’re not doing that because the credit card payment is not a purchase. You have an account which is allowed to be negative and it’s allowed to stay negative. Once a month, you have to purchase that privilege, just like you would with a checking account that had a monthly fee. you purchase it just like any other purchase, by budgeting to and spending from a category. 

      What you think of as “paying the card” actually isn’t a payment at all. You are transferring money from a positive balance account to a negative balance account. That’s why it gets no category in YNAB—it’s not a purchase. It’s functionally no different than moving money from checking to savings. 

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  • I get the reasoning here, but when I actually engage in the business of “transferring” money to the credit card and paying the interest, it’s generally one transaction with my credit card company. 
    For this month, it should have been a payment of $203, which isn’t represented anywhere in my budget.

    This is a little confusing, but it does make sense when you look at it the YNAB way. 
     

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    • Blue Sander It would have shown the $203 available amount if you hadn't made the $99 payment. 

      Not that you shouldn't have paid it as soon as you had money to avoid more interest accumulation, but you could have paid the entire amount that was available then.

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      • Blue Sander
      • Blue_Sander.12
      • 3 mths ago
      • Reported - view

      Good point.

      I wonder how to manage this with the timing of interest charges. Interesting problem....

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    • Blue Sander I see a few options:

      A) If you budget once a month, make a payment as soon as you budget the money to the CC category. The budgeted interest from the last month will carry over and increase your available each month.

      B) If you budget once a month, make two payments, one when you budget, and one when the interest hits.

      C) If you sweep excess money at the end of the month (didn't spend all the grocery money? I seriously don't know what that's like), AND your highest priority is paying down this card (maybe, maybe not) it can get included in the payment at the start of the month. 

      D) If you budget with each paycheck, make a payment each time you have money available. Odds are your interest charge will be near one of those dates, so that budgeted amount will be included in the following payment available. Same with any sweeping.

      Especially since you're carrying debt and interest accumulates all the time, there's no reason to not send your available amount (unless there's red elsewhere in the budget/you haven't reconciled yet). Just make sure not to send more than you have available in the CC category. 

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      • WordTenor
      • Can we agree that goals are dumb and immature? Sure.
      • WordTenor
      • 3 mths ago
      • 2
      • Reported - view

      Blue Sander Again, think of the interest like any other purchase. 

      You don't make two separate payment transactions to pay back the credit card spending at the grocery and then another to pay back the credit card spending at the gas station. It's one transaction. So you make one transfer transaction which includes all the spending you've done, including the spending that was the purchase of more time to pay back other purchases. 

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  • Thanks for the tip. Hopefully this will help others!

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