When I first started with YNAB it took me awhile to really understand how Credit Cards worked in my budget but once I understood it I think it's absolutely brilliant. The way YNAB handles CC was the thing that really sold me on the software and the principles behind it.
Thanks for explaining that credits should be categorized as Ready to Assign.... even though it doesn't impact the actual Ready to Assign in the budget. I just started YNAB and received a large return on my credit card. The original purchase was before I started YNAB so it was never in the actual budget. It made my credit card payment go red/negative and I COULD NOT for the life of me figure out how to fix it. Finally, I tried categorizing it as "Ready to Assign," and I worked, but didn't know why or whether it was correct until now. So thanks!
But what if you have several CCs with interest that you are paying over time.. How to you handle this? Do you put all of the cards interest in one “interest” category together?
Yes, I would total up the interest that I will be charged on all those cards - just an estimate with enough of a buffer to guarantee you won't come up short - and allocate that amount to your Interest category. Then, when you're charged interest on each card, you will record it as a transaction under that card (the payee can be whatever you want but I usually go with the name of the credit card company; the category will be "Interest.")
