The Credit Card Float

Sometimes, when you get started in YNAB, it can reveal to you that you’ve been operating in the credit card float—waiting on money to come in so you can pay the credit card bill for past purchases. Technically you pay the statement balance off each month, but you have to wait for income first.

The "float" is a term for any situation where you think of yourself as a paid-in-full credit card user, but in fact, you don’t have enough money on hand right now to pay your credit card in full and also budget for future spending.

How do you know if you're on the float?

Can you pay the credit card off in full today and still budget for your future spending? If not, that’s the float. Here are some ways you can tell:

  • Your Credit Card Payment category Payment amount is lower than the account balance.
  • The balance of your checking account is lower than the balance on the credit card.
  • When you make a payment to the credit card, the Credit Card Payment category turns red.
  • You’re getting confused by the dates of the statement and of the due date. If you’re not in the float, those statement dates (from the 26th of the month to the 25th) hardly even matter to you at all.

Here's how you'll know that you're truly off the credit card float:

  • Your Credit Card Payment category's Payment amount will match the debt in the left sidebar exactly:Credit-Card-PIF.png
  • You won't have any:
    • overbudgeting (a red To be Budgeted in the current or a future month)
    • cash overspending (red categories)
    • or credit overspending (negative yellow categories with a credit card symbol). 
  • Note that you don't need to have the entire month budgeted to be off the float! You can budget only for expenses that will come up before your next paycheck, then budget again when that paycheck comes in.

How do you get out of it?

Recognize that you have debt and may not be able to pay the card off in full. Commit to using the Credit Card Payment category to help you pay it off.

Budget for your upcoming expenses, and budget some money to the Credit Card Payment category. Always check the Credit Card Payment category before you make a payment—this may mean that you need to turn off automatic payments to the card.

You’re taking back control of this process, and you’ll pay the bill based on what you have set aside in your budget.

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