# Paying Down a Credit Card Balance Over Time > Make payments to your credit card, and track interest and fees. Source: https://support.ynab.com/en_us/paying-down-a-credit-card-balance-over-time-SkWj0Ls8Me Last updated: 2026-10-11T19:08:12.961Z Make minimum payments or pay more toward your credit card balance. Use targets in your Credit Card Payment category to help you make a payoff goal and stay on track. Use YNAB’s built-in Credit Card Interest category to account for interest. #### In This Article [Overview](#overview) [I'm Not Going to Spend on the Card](#not-spending) [I’m Actively Spending on the Card](#spending) [Handling Credit Overspending](#overspending) [Frequently Asked Questions (FAQ)](#faq) * * * ## Overview There are two main ways to set up a credit card you're working to pay down in YNAB. The most important question is—are you going to spend on this card? If you have a card where you're just paying the minimum balance or paying it down slowly, and you can choose **_not_** to spend on it, there's a very simple way to manage it in YNAB. Here are the two simplest ways to manage credit cards in YNAB: * **Set it up as a category/bill.** Don't spend on the card. This way, you can assign the minimum payment or the amount you want to pay, and pay exactly that amount each month. * **Set it up as a credit card account.** Spend on the card and fund as much of the current spending as you can. If you notice you don't have enough available in the Credit Card Payment category to make the payment, you can assign money directly to the Credit Card Payment category to cover prior debt. Most importantly, you'll always use the Credit Card Payment category amount to determine how much you pay each month. #### Decision Point * [I'm not going to spend on the card](#not-spending), just pay down the balance. * [I am going to spend on the card](#spending) while paying down the balance. [Back to Top](#backtotop) * * * ## I'm Not Going to Spend on the Card If you have a credit card you don't spend on and are just paying it down, we recommend adding it like any other bill: 1. [Create a category](https://support.ynab.com/adding-removing-and-customizing-categories-a-guide-HJFO5j909#new) with the credit card name and put it with your other monthly bills. 2. [Add a _Monthly_ _Set Aside Another_ target](https://support.ynab.com/how-to-use-targets-rk5kkI9ks#process) for the amount you want to pay each month. 3. [Assign money](https://support.ynab.com/en_us/assigning-your-money-a-guide-SypgkrNJi) there before the payment. 4. When it's time to pay the bill, it will just look like any other bill payment—an outflow categorized to the category. 5. When the card is fully paid off, you can hide the category. If you intend to [start using it to spend again](#spending), add it as an account and YNAB will create a new Credit Card Payment category for that card. **Context:** YNAB has automatic handling that sets aside money in a [Credit Card Payment category](https://support.ynab.com/en_us/credit-card-payments-a-guide-r1_506Q1j) as you spend on the card. This is intentional—to help you get out of debt and stay out of debt. But this handling isn’t necessary if you're not spending on the card. If you have a credit card you're actively spending on, the best way to manage it is to set it up as a credit card account type in YNAB. [Back to Top](#backtotop) * * * ## I’m Actively Spending on the Card If you want to pay just the minimum balance but you're actively spending on the card, it's important to understand [how credit card handling works in YNAB](https://support.ynab.com/en_us/handling-credit-cards-overview-ry7cNub1s). **Here's a quick summary:** when you spend money on a credit card and you've funded that spending category, money moves to the Credit Card Payment category automatically. Let's say you assigned your $300 minimum payment to the Credit Card Payment category. Then you used the same credit card to put $50 worth of gas in your car. If you've funded your transportation spending in the category, the $50 cash will move from the Transportation category to the Credit Card Payment category. Now you'll have more money available in your Credit Card Payment category—there will be $_350_ waiting for you to pay down on your card. ### Fees If you expect late payment or other fees, create your own category. When you fund this category, money will automatically move to your Credit Card Payment category like any other funded spending. ### Interest Charges on Credit Cards Interest charges are handled differently. [The first time you categorize an interest charge, YNAB automatically creates a single Credit Card Interest category](https://support.ynab.com/en_us/credit-card-interest-S1ovly_sMg#how-transaction) that all your credit card accounts share. This category doesn’t appear in the Plan tab; [learn more about how the Credit Card Interest category works in YNAB.](https://support.ynab.com/en_us/credit-card-interest-S1ovly_sMg) Interest charges won’t move money to your Credit Card Payment category. ### **How to set up a credit card you're actively spending on as an account:** 1. [Add your credit card to your plan](https://support.ynab.com/handling-credit-cards-overview-ry7cNub1s#process) as a Credit Card account. This will automatically add a Credit Card Payment category to the Credit Card Payments section of your plan. 2. [Add a _Pay Specific Amount Monthly_ target](https://support.ynab.com/how-to-use-targets-rk5kkI9ks#process) to your Credit Card Payment category for the amount you plan to put toward the existing balance on the card each month. 3. When transactions come into YNAB on this card, it's best to cover as much of them as you can. This is YNAB's way of helping you get out of debt and get the hang of covering your current spending as you go. As you cover the spending, [additional money will move to the Credit Card Payment category for you](https://support.ynab.com/handling-credit-cards-overview-ry7cNub1s#how). 4. When you go to make your credit card payment, check the Credit Card Payment category. The available amount in that category will be the amount you assigned, plus any funded spending you did this month, plus any money that rolled over from last month. That available amount is the maximum you can pay on the card. Make the payment and [record it in your credit card account register](https://support.ynab.com/en_us/credit-card-payments-a-guide-r1_506Q1j). Anything you don't pay down on the card can be moved elsewhere if you need it, or it will roll over for next month's payment. [Back to Top](#backtotop) * * * ## Handling Credit Overspending We know that paying down credit card debt isn't always a linear process. We recommend [thinking about your non-monthly expenses](https://www.ynab.com/blog/periodic-expenses) and trying to set aside some cash for those as you're paying down debt (sometimes intentionally paying down debt more slowly in order to save for these things). #### When You Need to Use the Card Sometimes you'll need to use the credit card to buy groceries or pay for an unexpected car repair, and that's totally okay. In that case, you'll leave the spending category yellow and negative. That signals that you did some spending on a credit card and there's not enough cash in the category to cover it. What you owe on the card will increase, and the cash you have set aside in the Credit Card Payment category will stay the same. The overspent amount will just be rolled into the existing balance on the card. You'll assign money directly to the Credit Card Payment category in a future month when you're ready to pay that purchase off. [Back to Top](#backtotop) * * * ## Frequently Asked Questions (FAQ) ### **Wait—why is there all this money in my Credit Card Payment category?** The available amount in your Credit Card Payment category is the sum of any money that rolled over from last month, the amount you assigned this month, and any funded spending (groceries, dining out, and so on) from the current month. This is by design—it just may take some getting used to! You have two options: pay that available amount down on your credit card balance (yay for paying it down faster!) or move the extra money elsewhere in your plan. Note: before paying a larger amount, confirm there are no red negative amounts in Ready to Assign or any categories in the current month. If there is red and you don't have any other way to cover it, consider using some of the Credit Card Payment category money to do so. If everything is clear, you can make a payment of that available amount to the credit card company. ### **What if I want to start spending on the card later, but I set it up as a bill/category?** That's totally okay! Make sure the Monthly Bill category for the credit card is zeroed out and hidden. Then you can set the credit card up as an account and start tracking the spending and the balance as part of your plan. If you have more questions, or neither of these setups seems to work well for the way you use or pay down your card, reach out to our Support team and they can help! [Back to Top](#backtotop) * * * ## Help Us Help You! Our Knowledge Base team reviews article feedback responses weekly, and we actively revise these articles to make them as helpful as possible. That's where you come in! Our articles are scored based on the _Yes_ or _No_ ratings received below. We also collect freeform feedback for any _No_ ratings (so our team can focus in on what you were specifically searching for!). **Success**: Found what you were searching for? It would be super helpful if you click _Yes_ below. **Suggestions**: Didn't find what you're searching for and you'd like to share what terms or topics you wanted? Click _No_ below. 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