Credit Card Says Overspent
I'm new to this, but I've read about 30 different posts on the topic of credit cards this week, however, I still can't quite figure this out. So apologies if this is posted elsewhere.
We use our miles credit card for all purchases. We carry the balance for the month, but it is automatically set to pay the balance in full each month. So we carry no debt. I have gone through and appropriately budgeted for all credit card purchases that have posted to the card and I have allocated my 'to be budgeted' money into the categories we intend to spend it on in the future of the month e.g. on groceries or gas, etc.
However, as transactions get added to my credit card - even as I categorize those transactions into their appropriate bucket, it is telling me that my credit card has been over spent in the budget.
Why should I have to allocate budget money to my credit card when all purchases are accounted for elsewhere in my budget. Isn't that double counting? I'm so confused! Appreciate the help.
Purchases made on the card prior to starting YNAB are by definition unbudgeted purchases. In order to make the payment on those purchases you must budget money to the credit card category to reserve the funds for the payment of those pre-YNAB credit card purchases. If you make the payment without having done that, then your payment category will show as overspent.
Are you talking about the orange message that pops up in the header of the credit card account page? You will need to go to the budget page & double check the things suggested by the others.
If the money wasn't in the category it won't get added to the credit card payment category and you will see that overspending note in the header of the credit card account page and the sidebar of the overspent category.
I'm obviously missing something really basic here. Since my CC account is linked, I assumed every charge was entered. But, as I look back I do, in fact, have some overspending for 3 of the last 4 months. But it is far less than the negative Available Payment amount.
I did do some weird stuff this past month: we bought a hot tub on the CC (have been saving for it in a budget category!). I was just creeped out having that huge balance on the CC even though it was budgeted for and we had the money, so I made a couple of payments during the month. But, I didn't pay (in total) more than was on the CC...and if every transaction was entered...
I'm so confused.
Every charge probably is entered. But that's a totally different thing than having money reserved for each of those charges. That is the function of the budget which is not really automatically managed.
This is so key for people to understand about credit card management. One must pay attention to all of the categories in the budget, especially any that are red.
But, I assigned every transaction a category and left no categories underfunded. I think it had something to do with the interim payments and a couple refunds. At this point, I'm not going to beat this dead horse. I *did* budget for the existing balance on CC when I started fresh. And, I will reconcile monthly.
I have the exact same problem. All of my CC purchases get funded because they get a category-- rather than just an account. There are no unfunded categories, but the account is still reading red-- overspent. For goodness sakes, the CC balance in the bank is 0 and YNAB is still holding money aside in the budget for CC with no attached category. This seems to me to be a YNAB flaw. I don't know where it is getting the $1800 set aside that it thinks I owe my credit card when the account is at a zero balance. 😂
Yes, thanks. I got a great video in email made by one of the staff. It explained that an overpayment to the card can show up as a negative balance, so the fix was to enter a positive number in the budget column in the case of overpayment. As I examined my account further I determined that there was a double payment entry causing the erroneous balance. Turning on the balance column also helped me see how YNAB was tracking things. Thanks again YNAB for keeping my budget real.
So I was having the exact same issue and read this article and most of the replies were not about what I was running into. Reading your topic made complete sense to what I was running into. It seems like YNAB was wrong or I had to double the budget (one for the category and one to cover the credit card payment).
Here was my scenario.
- Credit card: 0 balance
- Bank: $100 balance
- Category Groceries: $100
- Purchase $50 in groceries on Credit Card (mark it as Groceries transaction)
- Transferred $50 in groceries from Bank to Credit Card
- YNAB: Showed Bank transaction below the Credit card purchase
- YNAB status
- Groceries category shows: $50 spent, $50 available
- Credit Card Account balance shows: $0
- Credit Card in the budget shows: $50 overspent
- So even though I have not overspent it shows that I have
- What I did to fix this
- I changed the transferred $50 from bank to have a date greater than the grocery charge
- Then YNAB does not show that I had any overspent.
- Based on this description this looks like a BUG within YNAB for how it tracks credit card spending when we pay off our balances close to when we pay the charge.
Orchid Mermaid said:
you don’t yet budget additional for credit payment
Why are you doing this? The fact the purchase was budgeted AUTOMATICALLY increases the Payment category when you record the transaction. That money will sit there waiting until you send it off to the CC.
Following this thread, I think I understand how the YNAB Credit Card feature is meant to work, and for many months I have been using it without issue. I make budgeted purchases with my credit card, the funds accrue in the Available column under the Credit Card Payments category, I pay my bill when due, it all lines up.
But for one recent month, YNAB shows me as having overpaid on my CC, leaving me overspent in the Available category. For the life of me I can't figure out why, since all my CC purchases were to funded categories. I reconciled my Credit Card statements to see if I had missed logging some transaction, but didn't find any discrepancies. (My account is set to import transactions automatically, so this shouldn't happen.) Can anyone shed any insight into why this might happen?
As the screenshots below show, all my spending was budgeted, yet somehow I overpaid according to YNAB. This has not happened in any preceding month.
Superbone thanks for the reply. I have worked through all those possibilities and none seem to apply. (I do have like ~ $32.00 of overspending in the previous month, but nowhere near $671.65.) The balance has lined up for many months prior, so I don't see how a starting balance could be the issue. The only thing I can think of is an errant budget entry, but I compared with CC statements going back several months and couldn't find one.
It's making me a little bit crazy, but I'm tempted to just move on.
The simple answer to this question is that YNAB assumes that everyone is a credit card junkie, in over their head, and needs to budget to gradually pay off their massive credit card debts. This is counter intuitive for someone who is actually half decent at money management and simply uses the credit card as a payment mechanism or to allocate points. For someone who auto pays their credit card balance every month from another eg savings account all budgeting should already have been done and the payment is simply a transfer. Bottom line - YNAB needs a fix for this for people who simply use the credit card as a payment mechanism.