When Your Credit Card Payment Category is Red
When you see red in your Credit Card Payment category, it means you made a payment for more than you had Available in your Payment column. Red Available amounts indicate cash overspending, so when you send more to your credit card company for payment than you had set aside in your Credit Card Payment category, you've got overspending.
The solution, regardless of the cause, is to assign money directly to the Credit Card Payment category to cover the overspending.
If you pay in full, budget until the Available amount matches the account balance; if you carry debt, set a target to pay it off over time. If you don’t have any dollars Ready To Assign, you'll need to move money from other categories.
Do you pay the card in full?
If your Credit Card Payment category ended up red when you paid in full, it means there's a problem you can fix. Check out this article on When You Pay Your Card in Full!
To avoid this in the future, never send a payment to the credit card for more than you have Available in your Credit Card Payment category.
We bet you’d like to understand the cause this time though, so you know what to look out for in the future! There are four main reasons your Credit Card Payment category might be short before your payment or overspent after you make it.
- Credit Overspending. If you had any credit card overspending in your budget (in the current or a previous month), the Payment amount will be lower than the balance due. If you still paid the full amount, you’d have spent more on your credit card payment than was set aside for it.
Starting Balance. When you add a credit card to YNAB and it has a balance that you plan to pay off in part or in full with your next payment, you’ll need to budget for that Starting Balance by assigning money directly to Credit Card Payment category. If you paid down that Starting Balance but didn’t budget for it in the Credit Card Payment category, it'll show your Credit Card Payment category as overspent.
Assigning money for that balance lets the budget know you plan to take some of the money you have and use it to pay off that existing balance. Here’s a video explaining how this works.
Less Common Reasons
Overpayment. If your payment
created a positive balance on your card, the positive balance is treated like cash and is added to
Ready To Assign. Assigning those dollars directly to the Credit Card Payment category will bring it out of the red.
To check if this has been an issue with your Credit Card Payment category, go to your credit card account and turn on the running balance. We would expect a typical credit card to have red, negative balances or zero balances most of the time. If you see any positive running balances for your credit card, overpayment may be the culprit. To get back on track, reconcile your credit card account before adjusting your Credit Card Payment category.
- Returns/Refunds. If you had any returns/refunds on this card, and you paid off your card between your original purchase and your refund, you might see that your payment category is short and goes red.
No matter what caused it, it’s not necessary to go back to previous months to fix anything - fix it in the current month by assigning or moving money to the Credit Card Payment category.