Credit Card Payment is higher than account balance

I pay off my credit card every month. I use the Credit Card category in the budget to make sure that I have enough budgeted each month to pay it off, so I'm only really paying attention to my (newly named) Payment amount in the budget and the Credit Card Account balance.  When I make a payment I pay the total listed in the account balance, not the payment amount. 

 

I've noticed over the past few months that even though I'm paying down the account balance down to $0 each month the payment amount in my budget is going up. Currently, the account balance is fully reconciled - I have no uncleared balance. I do have a working balance, we'll say $80 for the sake of discussion, and a payment amount of say $200. I have no scheduled transactions. Where is this $200 coming from? If I paid my credit card using the $200 then I'd be overpaying my account balance, right? I feel like I'm missing something about using credit cards in nYNAB. 

Also, note that this is not new for me. I've always seemed to carry a higher budgeted/payment amount than what I actually seem to owe on the card so it's something I've been doing from square one. 

29replies Oldest first
  • Oldest first
  • Newest first
  • Active threads
  • Popular
    • WordTenor
    • I have the honor to be your obedient servant
    • WordTenor
    • 2 yrs ago
    • Reported - view

     Are you budgeting to the credit card payment category? If you are only doing budgeted spending, and you're not overspent, then each month  you should be able to pay the card to zero  and your card category should zero as well. 

     If you are a PIF user ( which you are according to what you described in your post)  then at all times your credit card payment category should equal the opposite of the working balance on your account.  Anything above this is excess that you have somehow budgeted to the category over time and can safely be moved. 

    Like
    • WordTenor I am not budgeting to the card payment and I am only doing budgeted spending. So I agree that I would expect the credit card payment category to be the positive equivalent of the negative working balance, which you point out. It's reassuring that you also see it that way, so I don't feel as nervous about moving that positive payment dollars to other budget items. Thank you for your input!

      Side note, what does PIF user mean?

      Like
  • We should probably migrate the post from the old forums about ways the account and category balances can become different.

    Like
  • Original post by Turf_Hacker in the old forums

    Credit to @dakinemaui for the list and @Joel for suggesting a sticky post on this topic.

     

    For your reference, here are the reasons I've found that the credit card account & payment category balances diverge (paid in full cards):

    • starting balance on a paid-in-full card - category is lower
    • overspending - category is lower
    • uncategorized transactions - category is lower
    • outgoing transfers to other on-budget accounts (e.g., gift card account, mixed funding splits) - category is lower
    • purchase/cash-back rewards (should be categorized to TBB) - category is higher
    • categorizing item returns as TBB (should use the original spending category instead) - category is higher
    • reconciliation adjustment - category is lower for an outflow adjustment, higher for an inflow adjustment
    • taking the account balance positive - category should be $0 in this case

    To correct the problem, budget whatever is needed to make them agree. Some of them can also be fixed other ways (e.g., overspending).

     

    If you're carrying debt on your card, your card balance and category balance will not, and should not, match. You can see the amount of debt being carried at any time  by clicking on the card's category and viewing the inspector: You'll see a line which reads, "If you pay [credit card payment category available] your account balance will be $X." That "X" is the amount of debt that is not presently budgeted to be paid off. 

    Like 2
    • Thanks for this - helped me figure out why two of my cards didn't match. One was cashback/tbb refunds from before YNAB, the other was an outgoing transfer to another account (my wallet). Cheers!

      Like
  • Hey Salmon Screwdiver (6492d5a43f8a) ,

    The list in this thread is a great resource for pinpointing the cause of that inbalance. If paying the full Available balance would put a positive balance on the card, you can use the move money tool to put those funds where you actually need them.

    If you can't pinpoint where those extra funds are coming from, you can always email support ( [email protected] ). With your permission, we can take a look at your account to find those details for you.

    P.S. - PIF stands for Paid in Full in thise case. :)

    Like
    • Faness at YNAB  that list did it! I had a return back in May that I sent to TBB instead of back to the category. Now all my numbers match up as they should. Thanks a bunch nolesrule !

      Like
    • MsTJ
    • YNAB has given me back my future
    • Believer_in_YNAb
    • 2 yrs ago
    • Reported - view

    I would like to second the motion this entry be made a sticky.  Having fought credit cards for so long and this makes it easier to understand what happened when things go wrong.  

    Like
  • I'm still confused.

    My cleared balance is 0. Uncleared balance 0. Working balance 0.  Actual credit card -- paid in full (every week). All payments go to credit card payment category.  Everything categorized correctly (I've had this budget for less than 2 months, so it's easy to check).

    But: Payment due = $17.48. Only in reality I have zero due. I've tried to create a work around but anything I do to get rid of the $17.48 also changes the cleared/uncleared/working balance categories. Any thoughts?

    Like
      • jenmas
      • jenmas
      • 1 yr ago
      • 1
      • Reported - view

      Coral Rhythm To be clear, that's not Payment Due, it's Amount Available for Payment. It's an important distinction because it means that as of right now, your budget has set aside $17.48 to pay your credit card; it isn't telling you that's how much you owe. If you have no red/orange entries in the past, present, or future (including hidden categories), and you credit card website tells you that the current balance is 0 and there are no pending transactions on their end, then in your budget go to the payment category and in the right hand column column click on the green $17.48 and move that $17.48 wherever you like in your budget. If this action turns the bubble in the Available amount in the Credit Card Payment category orange or red, then somewhere in your registers is a transaction that is associated with that available for payment amount. If it is just a gray 0, you are fine.

      Like 1
    • jenmas Thanks!

      Like
  • My starting situation is just like Coral Rhythm's above. When I move the excess money out  of "payment" column of credit card the new gaining category increases but the budgeted column for that credit card (which was zero) turns negative for the same amount that was moved

    Like
      • dakinemaui
      • dakinemaui
      • 6 mths ago
      • 4
      • Reported - view

      Aquamarine Cornet That's just how the budget column works. Positive numbers put money in, negative numbers take it out. Don't overthink the Budgeted value. The important number is the Available.

      Like 4
  • I have been racking my brain for the past few hours over this use case:

    nolesrule said:
    outgoing transfers to other on-budget accounts (e.g., gift card account, mixed funding splits) - category is lower

     I have an on-budget account that's essentially a credit with my Virtual Private Server provider.  I have a couple different categories for different VPS's, and I fund that account by making credit card payments on different cards, and then pay the card in full every month.  Eventually the VPS provider charges that credit account the have with me.  The VPN account needs to be on budget, and I transfer the funds from my credit card to the VPS when I make the payment.

    Sure enough, I'm in the negative after my recent payment.  I know that I have enough money in my checking account to cover this expense (since I'm basically just slowly transferring it over to my VPS), and I've used YNAB under the impression that it doesn't care where my money lives, as long as it has a job (and that $300's job is to pay my VPS).

    I guess what I'm asking is, if it's on an on-budget account, is it fine if I ignore it being in the red when this happens?

    Like
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 5 mths ago
      • 3
      • Reported - view

      Ivory Koala 

      Ivory Koala said:
      I guess what I'm asking is, if it's on an on-budget account, is it fine if I ignore it being in the red when this happens?

       No, you cannot ignore this. YNAB is a plan for all the cash in your budget. Any red in your budget tells you that your plan is infeasible, because you have more budget than cash.

      In the situation you describe, YNAB simultaneously puts an amount equal to the transfer into your To Be Budgeted. It should be budgeted back to the CC payment category. Think of it as taking a cash advance from the credit card. You made a charge on your card with no category, so by definition it's overspending. But at the same time, you have new cash which is now available to be budgeted. You should use that new cash to cover the overspending.

      Like 3
  • Ivory Koala said:
    Sure enough, I'm in the negative after my recent payment.

    You should not send Chase more cash than is Available in its category. It doesn't matter if you have enough in your checking account to avoid overdraft. Some of those dollars have other jobs, and they cannot do those jobs now that Chase has them.

    Like 1
  • This is how it all worked in my head:

    1. $500 in checking account, my "VPS A" category has $250 in it.  "VPS B" has $50.
    2. My VPS charges my credit card $300.  My credit card is -$300 but all $300 goes into the VPS's account.  The job of that $250 of that $300 is to pay VPS A and the other $50 is to pay VPS B, so both categories remain unchanged.
    3. Credit card payment charges my checking account $300.  Checking account has $200 left.
    4. VPS charges me $25 that month for VPS B.  This is an actual transaction, and I use the VPS category.  VPS account holds $275, VPS B category now holds $25, VPS A holds $250.

    I'm hoping I didn't budget myself into a corner.  I tried just moving my VPS's account to an off-budget account and even tried changing the transactions from transfers to just a charge by my VPS (which is what it actually is on the card) and either case results in TBB going in the red (by -$300, if I use the example above).

    I love YNAB and have been using it since 2014 (been on nYNAB since '17).  I have always felt like I had a handle on the setup (I love the way credit cards are handled too, and up until this point, I have never had issues).  With that being said, I'm embarrassed to admit that I'm trying to understand where that missing $300 went since it all made sense to me on paper.  I'm guess I'm not completely getting it...  Why do I end up out $300 when I make the charge?

    Thank you for your responses and patience!

    Like
      • P. Gillespie
      • loves YNAB
      • LAMB_CHOP
      • 5 mths ago
      • Reported - view

      Ivory Koala You might have to actually manually budget for the amount you're sending to your VPS accounts in your Credit Card Payments section each time you make the transfer (or budget the amount you think you'll be sending to the VPS accounts each month, in addition to the actual amount you'll be spending with the VPS accounts). I think you'll need to land on entering in the exact amount that was transferred out of these credit cards at the end of the month. Unfortunately, in my test on this, there's a yellow "overspending" amount in the credit card account, although everything else looks to be working.

      So, budget dollars you'll be transferring out of your credit cards in the Credit Card Payments section for each month AND budget the categories for the transactions that will come out of your VPS accounts. I think this will work; just an extra step for manually budgeting for the transactions in the Credit Card Payments section.

      I didn't do the full example you had above, but below works to keep the To Be Budgeted correct and the Payment is zero after I initiated a payment from the bank.

      Like
      • dakinemaui
      • dakinemaui
      • 5 mths ago
      • Reported - view

      Ivory Koala That is all fine. The piece you're missing is that YNAB assumes you will NOT pay off that transfer in #2. Since that is not your intention, you need to adjust the budget. As nolesrule said, TBB is also increased, so you should immediately budget those funds to the Chase Payment category.

      You probably missed that in the past, so pull funds from elsewhere to make the Chase Payment category cover the account balance.

      Like
      • dakinemaui
      • dakinemaui
      • 5 mths ago
      • 1
      • Reported - view

      Ivory Koala it would simplify things to consider the money spent when your CC is charged. (Use a split transaction if it's for multiple VPSs.)

      What value do you get from tracking the amount in the VPS account?

      I would leave that account out of YNAB, since presumably you get a statement that shows that balance. If you really want that amount in front of you, use a Tracking account (which is less work than your current approach).

      Like 1
      • P. Gillespie
      • loves YNAB
      • LAMB_CHOP
      • 5 mths ago
      • 1
      • Reported - view

      dakinemaui  I also had this same thought. This scenario is almost like keeping a cash/wallet account, which I stopped doing that years ago (way too much management). When I withdraw cash, that’s what it is, cash category. Nothing more.

      There’s a good podcast on this topic when Jesse talks about keeping a cash account and how you really don’t need to keep one.

      Like 1
      • dakinemaui
      • dakinemaui
      • 5 mths ago
      • Reported - view

      P. Gillespie interestingly, I think a cash account is the way to go unless you know exactly what the category is at the time of the withdrawal (almost never for me). In this case, the category is known, and the comparison to a cash category is an astute one.

      Like
      • dakinemaui
      • dakinemaui
      • 5 mths ago
      • Reported - view
      P. Gillespie said:
      way too much management

      FWIW, you can categorize what you feel is important, and chalk up everything else to the most likely category as a reconciliation adjustment. Almost zero management if that is your wish. However, it will simplify things greatly if you ever receive cash (e.g., from putting a joint lunch on your rewards card and picking up your friend's cash).

      The fact that picking up cash manifests as SPENDING is decidedly unintuitive to most people.

      Like
      • Ivory Koala
      • Ivory_Koala.9
      • 5 mths ago
      • 1
      • Reported - view

      dakinemaui P. Gillespie I admit, I also have a cash account.... along with  23 other on-budget accounts (varying from credit cards, to Flexible Spending accounts, to meal plan money at work)...  About 125 categories, etc.  But most of it is on "autopilot" so the budget budgets itself without issues, and I've only started having issues last month when I tried this whole transferring business.

       

      dakinemaui said:
      You probably missed that in the past, so pull funds from elsewhere to make the Chase Payment category cover the account balance.

       After going through everything, this is exactly what happened.  In the end, I had to find money from other categories to fix TBB, and now I'm properly balanced.  It wasn't making sense to me before, but now it does.  I was treating this like a transfer but it's not a transfer, it's debt.  It's like if I bought a $30 gift card but instead transferred it to an on-budget account-- I owe $30 on the card, but now my account has $60 in it according to YNAB.

      In the end, I've moved my entire "VPS Account" to an off-budget account.  The benefit for tracking it is just so I can see on a high level what's actually in it without logging into their website, so I can keep it topped off at $300, but in doing it the way I was doing before, I was treating future services paid as an asset -- cash -- and I guess that's not what it was.

      Thank you for all the help, I think I've grok'd it now.

      Like 1
      • Superbone
      • YNAB convert since 2008
      • Superbone
      • 5 mths ago
      • Reported - view

      dakinemaui Nah. I'm with Gillespie. It depends on the situation. It's definitely not for me. If you use a lot of cash then sure but I don't. I dabbled with one years ago but I don't need one at all and it hasn't been an issue in the slightest.

      Like
      • dakinemaui
      • dakinemaui
      • 5 mths ago
      • 1
      • Reported - view

      Superbone I hardly use cash at all, so it's NBD to enter a couple transactions a year. Agree it depends: if you want to defer the choice of category (relative to when cash comes into your possession), an account the easiest/safest way to do that. If you always know the category up front, direct categorization is easiest.

      Like 1
      • Superbone
      • YNAB convert since 2008
      • Superbone
      • 5 mths ago
      • Reported - view

      dakinemaui I can tell you after at least 8 years without a cash account, I do not need one in the slightest. My ATM withdrawals either go to a specific category or a misc category or both. If it makes you happy and brings value to you, do it.

      Like
      • WordTenor
      • I have the honor to be your obedient servant
      • WordTenor
      • 5 mths ago
      • 2
      • Reported - view

        For me the decision got made when I moved someplace with more cash-only venues and fewer ATMs. $40 is 20% of my dining out money, so in order to hang onto that in my wallet in case I end up in a cash-only place, I would either need to spend 20% less in dining out or spend the cash every month, which would then leave me with no cash for the cash-only places and defeat the purpose. Since the goal is to have cash in my wallet in case I need it but not spend it if I don’t, an account was the only way to go. It hasn’t been as bad as I would’ve thought it would be. 

      Like 2
      • jenmas
      • jenmas
      • 5 mths ago
      • Reported - view

      I rarely use cash in the US so it's no effort to keep a cash account (I've never been off more than $0.03 in a reconciliation). And when I travel for work, it's often to countries where about the only thing I can use my credit card for is the hotel, so I really do have to keep track of what I'm spending because it could be Reimbursables, it could be presents, it could be presents for ME (most likely Clothing and Accessories because it was a bag or jewelry. It's always a bag or jewelry), it could be OTCs, etc. But I don't actually do that in YNAB until later. It mostly goes down in the Evernote App in my phone because it's not in USD and the exchange rate gets taken care of later. Luckily in a lot of the these countries, they don't deal much with non whole numbers - things get rounded up or down when you get your change. For me personally, the 5 seconds out of my life it takes to record these transactions in either YNAB or my phone is immaterial and just a thing I do, like putting away my wallet. Plus it just happens to be easy for me to hold those numbers in my head for about 12 hours.

      Now, a few years ago, I did use a cash category because at the time I was just getting into YNAB but didn't actually care about most of day to day categories because I knew I was months away from moving from the country that I lived in to the US and therefore none of my categories were worth tracking - it was a completely different cost of living, my housing and utilities were paid for by my company, I was receiving an extra 20% in hardship allowances plus a monthly COLA bump, and I wasn't paying income tax. So I took out cash every week and counted it as spent because it paid for everything - groceries, restaurants, monthly internet, monthly landline, reimbursing my company for personal use of the company car. I was mostly using YNAB to build up category balances for when I moved back home. Looking back through those months, the activity was mostly online stuff (Netflix, Amazon, donations, plane tickets home for vacation) and the mortgage on my home in the US.

      Like
Like9 Follow
  • Status Answered
  • 9 Likes
  • 5 mths agoLast active
  • 29Replies
  • 4682Views
  • 15 Following