# Credit Cards ## How credit cards work in Actual Budget Credit card accounts are on-budget accounts with a negative balance. Actual treats them like any other account — the negative balance is subtracted from your positive deposit account balances to give your total on-budget funds. When you make a credit card purchase and categorize it, the money comes from that budget category (just like a debit card purchase). The only difference is the timing of when the actual cash leaves your checking account (when you pay the credit card bill). **Key insight:** If every credit card purchase is categorized to a funded budget category, you will always have enough money to pay the bill. The budget already accounted for the spending. ## Strategy: Paying in Full (Within the Budget) Use this when you pay off your credit card statement every month. ### Rules - Never over-budget. Only budget funds you actually have - Check your category balance before spending - Enter purchase transactions promptly - Cover all overspending by moving money between categories - Reconcile accounts at least monthly - Pay at least your statement balance before the due date ### Setup 1. Confirm the account is a credit card (not checking/savings) before creating it. 2. Create the credit card as an on-budget account with a negative starting balance. Include account type in the name: ```bash fscl accounts create "Chase Credit 5736" --balance -35.00 ``` 3. No special budget category needed — each purchase uses your regular expense categories ### Monthly workflow 1. Throughout the month, categorize every credit card purchase to a funded category 2. When the statement arrives, note the New Balance 3. Reconcile the account 4. Pay the statement balance as a linked transfer from checking: ```bash # Add/import the payment on checking fscl transactions add --date 2026-02-15 --amount -213.15 \ --payee "CHASE PAYMENT" --notes "Statement payment" # Convert matching entries into linked transfers by setting payee to the transfer payee # (find via "fscl payees list", where transfer_acct=) fscl rules create '{ "stage": null, "conditionsOp": "and", "conditions": [ {"field": "account", "op": "is", "value": ""}, {"field": "imported_payee", "op": "contains", "value": "CHASE PAYMENT"} ], "actions": [ {"field": "payee", "op": "set", "value": ""} ] }' fscl rules run --dry-run fscl rules run ``` ## Strategy: Carrying Debt Use this when you have a credit card balance you cannot pay in full. The goal is to pay it off safely without incurring more debt. ### Setup 1. Create a "Credit Card Debt" category group: ```bash fscl categories create-group "Credit Card Debt" ``` 2. Create a debt category for each card carrying debt: ```bash fscl categories create "Citi Card Debt" --group fscl categories create "DEMO Card Debt" --group ``` 3. Enable rollover overspending on each debt category: ```bash fscl month set-carryover 2026-02 true fscl month set-carryover 2026-02 true ``` 4. Create the credit card account with the total amount owed as the starting balance, categorized to the debt category. Include account type in the name: ```bash fscl accounts create "Citibank Credit 4455" --balance -2590.00 ``` The starting balance transaction should be categorized to the debt category. ### Why rollover is needed Negative credit card account balances are already subtracted from your available on-budget funds. Without rollover, the negative debt category balance would also be deducted from "To Budget" — double-counting the debt. Rollover prevents this. ### Monthly workflow (card with debt, no new purchases) 1. At the start of the month, budget the expected minimum payment to the debt category: ```bash fscl month set 2026-02 90.00 ``` 2. If you have extra money after funding all expenses, add it to the debt category to pay down faster: ```bash fscl month set 2026-02 290.00 # 90 minimum + 200 extra ``` 3. When the statement arrives, enter interest and fees as a transaction categorized to the debt category: ```bash fscl transactions add --date 2026-02-10 --amount -64.00 \ --payee "Citibank" --category --notes "Interest charge" ``` 4. Make the payment as a linked transfer from checking: ```bash fscl transactions add --date 2026-02-15 --amount -290.00 \ --payee "CITIBANK PAYMENT" --notes "CC payment" # Rule converts payee text to the card transfer payee ID fscl rules create '{ "stage": null, "conditionsOp": "and", "conditions": [ {"field": "account", "op": "is", "value": ""}, {"field": "imported_payee", "op": "contains", "value": "CITIBANK PAYMENT"} ], "actions": [ {"field": "payee", "op": "set", "value": ""} ] }' fscl rules run --dry-run fscl rules run ``` ### Monthly workflow (card with debt AND new purchases) If you must use a card that has existing debt: 1. Categorize new purchases to regular funded budget categories (staying Within the Budget) 2. When the statement arrives, enter interest/fees to the debt category 3. Reconcile the account 4. Calculate payment: - **Payment = New Purchases - Return Credits + Uncleared Total + Budgeted Column** - Or equivalently: **Account Balance - Debt Category Balance** (using absolute values) 5. The minimum payment must be at least the statement minimum ### Paying off the highest interest first When carrying debt on multiple cards: - Budget minimum payments for all cards - After funding all necessary expenses, add extra to the highest-interest card - Once the highest-interest card is paid off, redirect that extra payment to the next highest - Use only one card for new purchases and pay it in full monthly ### Important notes - All credit card accounts should be **on-budget** (not off-budget) - Include account type in the account name (for example, `Chase Credit 5736`) so account context stays clear in future chats - You cannot change an off-budget account to on-budget — set it correctly from the start - Only set a credit card as off-budget if there will be no new purchases and the account will be closed once paid off - A credit limit is not an invitation to spend it - If you lose your grace period due to late payment, you'll incur interest from purchase date on all new purchases until you pay in full for several consecutive months