The Credit Card Float on Mobile

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

The "float" is a term for any situation where you don't have enough money on hand to both pay your card in full and also budget for future spending. Even if you're a paid-in-full credit card user, you might be unknowingly riding the "float!" 😱

How to Tell If You're on the Credit Card 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:

  1. Your Credit Card Payment category Available amount is lower than the account balance. 
  2. The credit card account has a balance of -$1800, but there is only $1400 available in the Credit Card Payment category.
  3. The balance of your checking account is lower than the balance on the credit card.
  4. When you make a payment to the credit card, the Credit Card Payment category turns red.
  5. 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.

Breaking Out of the Float

Let's take a look at the steps we can take to get out of the float (and how this will appear in your budget)! 

How to Get Out of the Credit Card Float

  1. Recognize that you have debt and may not be able to pay the card off in full. 
  2. Commit to using the Credit Card Payment category to help you pay it off.
  3. When assigning money for your upcoming expenses, be sure to assign some money to the Credit Card Payment category, too. 
  4. 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.

How to Confirm in Your Budget That You're Float-Free

  1. Your Credit Card Payment category's Payment amount will match the debt balance on the account exactly. 
  2. The credit card account has a balance of -$1400. There is $1400 available in the Credit Card Payment category.
  3. You won't see any overassigning (a red Ready to Assign in the current or a future month))
  4. You won't see any cash overspending (red categories)
  5. There's no 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.

You’re taking back control of this process, and you’ll pay the credit card bill based on what you have set aside in your budget. Our article on credit card payments has more details! 

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