Setting up Your Credit Cards
How do I create a credit card account?
Step 1: Add the credit card account.
Click on the Add Account button at the bottom of the sidebar to add an account for your credit card. A pop-up will appear. Complete the information requested for your card, including the starting balance and starting date. Under Account Type, select Credit Card from the drop-down choices. When you are finished, click Create Account.
To determine your starting balance log onto your account online and look at the closing balance the day before you start YNAB. Then make sure that you enter any transactions that clear AFTER that balance. Make sure you budget for them too! It's a good idea to check daily for what clears during the first week just so you don't miss anything.
Step 2: A new account has been created in the sidebar.
The new account name now appears in the sidebar under Budget Accounts.
At the bottom right of your account in the Totals Window, you will see your cleared balance, a total of uncleared transactions, and your working balance.
A categorized transaction has been entered for you in the new account for the balance on the card.
This transaction was categorized to a new Category - created for you by YNAB - that matches your credit card account. This was done because, while you incurred this debt prior to working with the account in YNAB, dealing with it must be part of your current budget plan. The title of this category will be Pre-YNAB Debt: (Name of Account).
Step 3: Go to the Budget.
Click on Budget in the sidebar to move to the Budget.
Step 4: Notice that the category created by YNAB to match this credit card account has also been added to the Budget.
This is where you will budget for the prior debt.
The starting balance on the card has been categorized to this newly created category, and you will see that amount in the Outflow column.
The starting balance has been entered as an outflow and the red arrow in the Balance column has been turned to the right. This red arrow controls the overspending settings, and with the arrow turned to the right, the negative balance only affects this category and has no impact on the rest of your budget.
How do I handle prior debt on a credit card?
Step 1: Go to the Budget.
Click on Budget in the sidebar to move to the Budget.
Step 2: Budget money in the Pre-YNAB Debt Category for the account.
Enter an amount in the Budget Column in the Pre-YNAB Debt: (Name of Account) category that YNAB created for you to match the credit card.
This should be the amount you’d like to pay on the debt this month. Essentially, budget something for the payment you will be making this month. For example, if you are planning to pay $200 toward your debt (not including new purchases on the card), budget $200 in this Category.
Always make sure you have money Available to Budget before you assign money to Categories.
Notice that the Category Balance in this category has now changed to reflect the amount of you’ve budgeted. It now shows that you owe less on the card. You’re making progress!
Keep in mind, you still need to make the actual payment to the credit card company in order for the balance to go down.
Learn how to record a payment to your credit card and to how to deal with interest and fees.