Credit Card Overspending on Mobile

Rigid budgets break, so we built YNAB to be flexible. The reality is that overspending happens for all of us—your budget is here to help you get back on track. 

If you have general questions about covering overspending (or you're looking to know more about cash overspending), check out our article on overspending basics. If credit overspending is what you're after, read on! 

Funded vs. Non-Funded Spending

There are two types of spending in YNAB—funded and non-funded. That's true for spending with cash, and for spending with credit. Of course, YNAB is helping you plan for your credit card payments, so credit spending is handled a bit differently.

Funded Spending

When you make a purchase on your credit card that is funded (meaning, you've assigned enough money into the category you're spending from), money will move automatically to your Credit Card Payment category—it will sit there until you're ready to pay the bill. 

Let's say you have at least $100 available in your Groceries category, and you make a purchase on your credit card for $100.

Once you've entered that transaction in the account register, $100 will move from the Available amount in the Groceries category to your Credit Card Payment category. It will stay there, ready and waiting to make a payment on the card.

An arrow between the Groceries and Credit Card Payment categories shows that $100 has moved between them.

Non-Funded Spending (Overspending)

When you use your credit card to buy something and you haven't assigned funds to cover it, dollars will not move to your Credit Card Payment category. You don't have enough money available in the spending category —you now owe more on the card than you have set aside to pay.

Let's look at a second purchase—this time, there was no money assigned to the Clothing category (or Available) when the transaction was entered. This creates $75 of credit overspending in the Clothing category (shown by a yellow icon with a negative number) and no money moved to the Credit Card Payment category for the payment:

There is $75 of credit overspending in the Clothing category and there is no additional money in the Credit Card Payment category.

You can tap on the blue Overspent Categories banner at the top of the Budget tab at any time to see which categories are overspent, and cover them. 

Credit Card Payment Category Activity

You can also view more specific details about the overspending within your Credit Card Payment category itself. Let's say that the balance on your card is -$175 (you can confirm the account balance by tapping the Accounts tab and looking at the credit card account in question). But when we view the Credit Card Payment category again on the Budget tab, we see in the image above that there is only $100 available for payment! Let's take a look at where the shortage is coming from. 

How to Find the Activity Details

  1. Tap the Credit Card Payment category. 
  2. Tap Details. 
  3. Tap Activity in [Month].
  4. In the Activity window pop-up, you'll see how much was spent on the card this month versus how much was funded spending. 

Activity details found at the top of the screen say 'Of the $175 of credit spending this month, $100 was budgeted for'.Continuing with our Clothing category example, we see here that $175 was spent on the card, but only $100 of that was funded spending. This means even though the balance on the card is $175, we can only afford to pay $100 back to the credit card (unless we cover the credit overspending in the Clothing category in the current month!). 

Overspending Becomes Debt

Ideally, you'll move money to cover overspending in the month it happens. If you do, YNAB has your back—dollars will be moved to the Credit Card Payment category for your payment and you won't have a care in the world when your credit card statement arrives. 

But what happens if you can't cover the overspending before the month ends? You've increased what you owe on the card without increasing the cash you have set aside to pay it by the same amount. You've essentially accrued new debt. 

When the month rolls over, categories with credit overspending reset to $0—you no longer need to assign money in those categories in the previous month to cover the purchase. Now you owe your credit card company money, and you need to budget for a higher payment. Assign funds directly to the Credit Card Payment category in the current month.

Once the Payment or Available amount in the Credit Card Payment category matches what you need to pay—debt from previous overspending plus money for new budgeted purchases—you can confidently make your payment. Need a refresher on this process? Our article on credit card payments has got your covered!  

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