Budgeting with Credit Cards

If you’re paying off the balance in full each month (e.g. not carrying a balance and working to pay off credit card debt) then you don’t need to budget for the payment. If you’re trying to pay off debt there are some workflows documented along with the Debt Planner community template to help you think about how to categorize transactions.

The reason this doesn’t double count is that when you are using your credit card you aren’t actually spending the money, you’re just incurring debt (i.e. the money hasn’t yet left your checking account and reduced the balance of that account). When you pay the balance in full use a transfer type category (type on the Categories sheet is set to Transfer) which won’t show up on the budget.

Credit card spending doesn’t need to be budgeted separately either. You can categorize the transactions based on actual spending like groceries or gas.

I realize this workflow could be stressful to some if you need to see how much money is going to be due in the future to make sure you have that money in your checking account to pay it off or don’t want to spend more than X amount on the credit card per month. I think this is where @pixel.dick uses the projected balances sheet to understand how much is going to be due. Another option might be to use the Tags Report to help you analyze this.

Everyone’s financial situation is unique, but generally if you’re struggling with credit cards or have anxiety about your credit spending/payments perhaps consider not using them anymore and just work with the funds that are available :thinking:

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