When You Pay Your Card in Full
YNAB is designed to help you pay off credit card debt, but it works equally well for YNABers who pay their cards off in full regularly!
Here's an overview of managing a credit card you keep paid in full:
Setting Up a Paid In Full Credit Card in Your Budget
When you first add your credit card to your budget, you'll want to be sure to budget for your "pre-YNAB" balance on that card.
After following the steps to add a new account, pick the Budget for my entire balance option. This ensures your budget has the amount of your balance set aside so you can pay that in full when you send your next credit card payment.
Next, you'll see a Credit Card Payment category for your credit card in your Budget. There will also be a yellow alert in that category, prompting you to budget for your Starting Balance. Budget for your Starting Balance directly to the Credit Card Payment category, and your Availalbe amount will update.
Using a Credit Card for Day to Day Spending
After you budget for your Starting Balance, you'll now budget for your day to day expenses in your spending categories--not in the Credit Card Payment category.
As you spend on your credit card, the money you budgeted to your spending category will automatically move to your Credit Card Payment category. Here, the money sits, waiting for you to make your next payment.
If you ever overspend with a credit card in any of your categories, you'll see a yellow credit overspending alert:
Sending Your Payment
If you are a paid in full credit card user, your Credit Card Payment category Available should always match the account balance owed. If it doesn’t, budget more to the category until it matches like the screenshot below:
Can you budget for it all?
If you aren’t able to budget for the full starting balance of your credit card and all of your current month's expenses, you might be riding the credit card float.
When you set up your budget, you’ll see the account balance on the left, but the Payment amount won’t update automatically to cover that balance. Budgeting for it lets your budget know that you plan to take some of the money you have right now and use it to pay off the Starting Balance on the card.
What if I pay the statement balance?
Can I keep paying only the statement balance? Does it matter when I pay my card? (like weekly or once a month on the 10th or at the beginning of the month..?)
Yes! You don’t have to actually pay the balance on the card down to zero. You can pay the statement balance and still consider yourself paid in full, as long as you have the money set aside to pay it off completely at any time. Set aside where? In the Credit Card Payment category!