
How to handle the deposit on a secured credit card
I just got a secured credit card to help repair my credit and I deposited 250.00 from my savings account to secure the card. I'm not sure how to record the transaction. I assume I just transfer in YNAB between the 2 accounts and I'll show a +250.00 balance in the credit card account, and that charges on the card will just reduce the positive balance, and that I'll just bring the card balance back up to +250.00 each month as I pay the balance in full. Is this correct? Thanks.
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Hey Slate Gray Storm !
That's exactly right with the transfer! :)
I know that some credit card companies will eventually refund the deposit and increase your credit limit. If you set the account up as a credit card now, you won't need to change anything if that happens in the future.
To learn more about how credit cards work in the new YNAB, take a look at our Quick Start Guide to Credit Cards and consider taking our Master Credit Cards with your Budget workshop! :)
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Slate Gray Storm I would not do the transfer that way at all! The balance on your card will never be correct. It is not treated like a debit card where you have $250 available and each charge reduces that balance until you reach zero. It is a account for the same as any other credit card. If you make a purchase for $100 your card balance is -$100. You owe $100. If you do the transfer as Faness suggested, you will show a positive balance of $150!!
Instead, you should create a tracking account for that deposit. It is NOT money that is available in your budget. For now, it is gone and needs to be budgeted for. Transfer the $250 from checking to the tracking account. You will need to create a category in your budget called "CC Deposit" or something similar, and you will categorize the transaction to that category.
You will open the CC account in YNAB just as you would any other credit card.
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bevocat Thanks for the idea, though I'm still not clear about how to account for that. Create a subcategory (under which category?) and create a one-time transaction or transfer? I deposited this many years ago. Does the date matter? YNAB pulls the amount from that and other accounts at that institution.
Could you share the link to that thread and/or be more concrete.