Using Credit Cards with YNAB: The Complete Guide

[@jeantesc812]

When I first started with YNAB it took me awhile to really understand how Credit Cards worked in my budget but once I understood it I think it's absolutely brilliant. The way YNAB handles CC was the thing that really sold me on the software and the principles behind it.

[@e22ddie46]

Lol I'll have to try to figure it out. I think between this and transfers between accounts, I got so confused I stopped using it.

[@kiaradanielle8631]

Thanks for explaining that credits should be categorized as Ready to Assign.... even though it doesn't impact the actual Ready to Assign in the budget. I just started YNAB and received a large return on my credit card. The original purchase was before I started YNAB so it was never in the actual budget. It made my credit card payment go red/negative and I COULD NOT for the life of me figure out how to fix it. Finally, I tried categorizing it as "Ready to Assign," and I worked, but didn't know why or whether it was correct until now. So thanks!

[@dljg5442]

Thank you! I did not realize that the overspent category from last month did not carry over, it reset to zero. That was a lightbulb moment for me and I am back on track. Great video.

[@AnibalMontilla_]

I really enjoy when Ernie works on the workshops.

[@janesprague1]

Ernie, this is the absolutely BEST explanation of how credit cards work in YNAB. I've been a YNAB user almost since the beginning, and I finally understand how credit cards work. Thank you soooo much!

[@BXMurphy]

Nicely done! The light bulb in my head just flickered on. Thank you for the vid. Big help!

[@Michaelangilo-b8h]

Very thorough. Credit cards is a little confusing but this cleared it up :)

[@cherylreynolds8148]

I've been a Ynabber since Ynab 4, and I still watch these videos. How it has changed. :-) Great job; it's always good to get a refresher.

[@Jud450]

Very helpful. Thanks so much for doing this video!

[@GeoffreyHanan]

Thanks for the great content I’ve been a YNAB user since 2018 and it changed my life financially but I had to remove my credit cards because it was too confusing for me when I was just starting out with budgeting in general. Now I’m so comfortable with my financial literacy and responsibility that I want to take advantage of my credit card benefits while also keeping the balances low, so I’ve found myself here learning how to do it before pulling the trigger on importing those credit cards. I was a bit trepidatious at first but this walkthrough put me at ease and made sense it of it all for me. Thank you! The fact that YNAB is putting out high quality customer success oriented content is part of what makes the subscription price worth it. Keep it coming!

[@YNABofficial]

You're very welcome! Happy YNABing with those credit cards, and don't hesitate to reach out if you run into any issues! ~Ernie

[@danawegner9572]

Ernie, this video helped me so much. I will probably watch again as I make some actual changes to my YNAB budget. Thanks again!!! 🤩

[@candacematthews3511]

Thank you so much for this video! I’m new to YNAB and so excited to see how it helps us pay off debt

[@famillesta5638]

Love your videos ! Thank you Ernie.

[@TT92348]

37:00 why does YNAB not do this automatically? I pay my cards in full every month and I always have to manually deduct statement credits from my available balance for my CC’s. It gets a little tedious

[@elizabethman7313]

I think you migh not have linked the account

[@YNABofficial]

Because not everyone wants to remove the statement credits from their payment category. Some keep them in there to help pay off debt faster. ~Ernie

[@TT92348]

@@YNABofficial Could there be a flag/checkbox added for those who pay off cards in full every month? I carry no CC debt so the statement credits are always excess money I could move to RTA.

[@YNABofficial]

@@TT92348 that would be a great feature request! If you want, you can submit here ynab.typeform.com/to/Pt6cek ~Ernie

[@JadAbiNassif]

In the case your CC balance is already 0, an inflow to the CC categorized as RTA, goes to your budget RTA as well as decreasing your CC balance? Where as if you have a a CC balance, it only decreases that without affecting your budget RTA?

[@GigaChadBigW]

this man is the best!!!!!

[@viktoriyaphillips4449]

The best explanation! Thank you!

[@maryl1829]

Best explanation of credit cards I’ve seen for YNAB and I’ve been using the tool for a number of years. It’s complicated and the written tutorials do not really “show the math.” Thank you. Please do some follow up videos. For example, I suggest you explain the activity information for the credit card payment category. This is confusing in that my credit card due date is mid month and it’s always confused me why I, after I pay off the card, the activity is not equal to zero.

[@YNABofficial]

Thank you! The activity field in the CC payment category is confusing, and I recommend ignoring it. That number isn't going to tie back to any numbers you find on your actual CC statement. The main number to focus on in the payment category is what you have available. Hope that helps! ~Ernie

[@velociraptorxxx]

Thank you, that was great.

[@christinaquinn9132]

The last part where you buy something and return it. What if the return comes in the next month.

[@YNABofficial]

Same workflow-categorize the return to the original spending category! ~Ernie

[@moneementor5175]

So, should I have to fund the credit card category every month PLUS fund the category every month (like groceries)? Wouldn't that be doubling the budget?

[@YNABofficial]

Depends on your situation. If you're pay-in-full, you should only have to fund the CC category your first month. This will cover all the pre-YNAB stuff you bought on the card. If you're paying a card off over time, you will fund the CC category each month with the amount you want to send as a payment. ~Ernie

[@adrianwilliams63]

So what if I have my Verizon Visa linked that’a the way I pay my phone bill. Do I still need a “Phone” category when all I’m doing is paying the card off? Or do I keep both Verizon Visa link as well as have a category for phone and I still somehow tracked those together?

[@YNABofficial]

Yes, still need a phone category. And make sure you fund it. Then when you pay the bill using your Visa, categorize the transaction to your phone spending category and YNAB will move the money from that category to your payment category. You'll see the money is now available to send to Visa as a payment. ~Ernie

[@adrianwilliams63]

@ ahhhh. Got it. Thank you!

[@BarbB_in_TN]

But what if you have several CCs with interest that you are paying over time.. How to you handle this? Do you put all of the cards interest in one “interest” category together?

[@LeahBandB]

Yes, I would total up the interest that I will be charged on all those cards - just an estimate with enough of a buffer to guarantee you won't come up short - and allocate that amount to your Interest category. Then, when you're charged interest on each card, you will record it as a transaction under that card (the payee can be whatever you want but I usually go with the name of the credit card company; the category will be "Interest.")

[@bryansmith331]

That’s what I do.

[@kylebringhurst4563]

When I use my credit card I make sure there's a Payee, a Category, and an Outflow amount, but when I save it it doesn't adjust my payment section on the card (grayed out), and it doesn't add anything to my auto-created Credit Card Payment Category (the activity is section is negative and doesn't go up like this), and it says there's $0 available even after adding a test one manually like this, but it's green. Am I doing it right? Is there a bug? Has anyone ran into this before? It's really throwing me off

[@YNABofficial]

It sounds like you might have a positive balance on the CC account. More details here support.ynab.com/en_us/credit-cards-with-a-positive-balance-an-overview-By_H6uzJo#happens Let me know if you have any other questions! ~Ernie

[@leoulzewdie5570]

Very good tnx

[@DanielM-w5h]

Why pay one credit card with "add transaction" and the other with "record payment"?

[@YNABofficial]

Just two ways to accomplish the same thing! We wanted to show both so you could see your options. ~BenB

[@LauraHala]

When I enter a cc reward, it is moving the $ to "ready to assign" as though it is additional cash flow, and not taking it from the cc balance, I believe that I have followed the instructions to the letter. I have messaged the chat box but am hoping to resolve this asap!

[@YNABofficial]

The only time a CC reward that is categorized as Ready to Assign would produce money in Ready to Assign is if the reward made the balance go positive. support.ynab.com/en_us/credit-cards-with-a-positive-balance-an-overview-By_H6uzJo Do you know if this is what happened? ~Ernie

[@heathermilton6313]

How do you handle a credit card refund in the next month? Would you still assign to the original category and have a negative spend for that month?

[@YNABofficial]

Always categorize the refund back to the original spending category! If in that next month your Credit Card Payment category goes negative after entering the return, move the money back to the Credit Card Payment category from the original spending category. ~Ernie

[@rollingrejuvenationrr1342]

I’m still having trouble wrapping my brain around refunds. I order on Amazon, cost $32.27. I pay the c.c. Bill to $0. I then return an item and get a $6.24 refund. How do I use that in the budget because I don’t have that “cash” in my bank acct, it’s only on the c.c. I’m likely complicating this in my brain more than needed. HELP!

[@YNABofficial]

You don't have that cash in your bank account, but you do have that cash-the CC company owes you $6.24. So I would categorize the refund to the original spending category and then you should see a new $6.24 available to spend in that category (and you can always move it somewhere else if you want). Here's a video to show you all the details help.ynab.com/z8u9PDDQ ~Ernie

[@BitcoinSatoshiVision]

First!

[@vincentapa1376]

Mr. Credit Cards

[@rorojagg8881]

If your product is geared towards people using credit cards why wouldn’t you have a dummy account showing the ACTUAL steps to liked credit cards. As a visual learner , not good at budgets with ADHD this is so painful. I have spent an hour looking for examples on KZbin. This is just lazy production. Sorry I’m paying for actual help ugggg. We’re not here bc we know what we are doing.

[@Shello58]

I only use the Mobile feature so.. not helpful

[@hjardine24]

This is such a braindead comment 😂

[@zo2ahy]

kzbin.info/www/bejne/nqu5oaB4q5umadUsi=SbXRPMuFseYjXyuo&t=2198 So the credit card cash back was marked as Ready to Assign. Why does this not affect the Ready to Assign from the budget? Isn't that additional money that is now at your disposal? How come Ready to Assign doesn't mean Ready to Assign?

[@YNABofficial]

In this case with CCs, it's just a weird workaround we have. And the reason it doesn't affect RTA is because it's not NEW money at your disposal. It's a credit of money you already spent, so YNAB reduces your balance and then you can move that amount out of your CC Payment Category to wherever you want. Hope that helps. ~Ernie