Overview

Getting Started Fundamentals First Steps Quick Overview

Budgets

How it Works Budget Dashboard Editing Categories Budgeted Amounts

Accounts

Adding Accounts Credit Cards Reconciliation

Transactions

Transactions Dashboard Adding Transactions Clearing Transactions Split Transactions Tags Sorting Transactions

Charts

Income Expenses Expenditure

Accounts

Credit Cards

How do credit cards work in Climb

When you add a credit card account, a new category is automatically created under the Pre-Budget Debt Category Group, and a Starting Balance transaction is placed in it. This category represents the total balance on your credit card before you started using Climb, allowing you to budget for that debt. The Starting Balance transaction reflects the amount owed on the card when you added the account, and this is the only transaction that will go into this category. Going forward, any new purchases made with your credit card should be categorized under your regular spending categories, such as Groceries, Fuel, or Gifts.

Once you've added your credit card you have two options on how to handle the negative balance relected in the amount remaining column: budget the entire amount immediately or gradually over time.

If You Have Enough to Cover the Entire Debt

If you have enough funds available to cover the entire pre-budget debt category, congratulations! Here's what to do:

Budget the Full Amount

Enter the total starting balance (pre-budget debt) amount in the budgeted column for the credit card category.

Hide the Category

Once you've budgeted the full debt, the amount under the remaining column on the budget dashboard will no longer be negative. You can now hide this category from your view if you prefer not to see it anymore. Just remember that this only hides the category—it doesn’t delete it, so you can unhide it if needed later.

If You Need to Pay It Off Over Time

If you can’t fully fund the pre-budget debt category right away, that’s perfectly okay! Here's how to manage it:

Budget What You Can

Start by allocating what you’re able to this category each month. This budgeted amount might not match your payment amount especially if you continue to use the card for regular spending. Don't worry though, the rest of your spending is still tracked in other categories (like Groceries or Fuel), so your budget remains intact.

Paying More Over Time

Each month, revisit this category and continue to allocate available funds. Over time, you'll see the negative balance in this category shrink as you work toward fully funding it.

Remember, even though you may continue to use the credit card for new purchases (who doesn't like credit card miles, right?), those transactions should be categorized under your regular spending categories, not the Pre-Budget Debt Category. One of Climb's key fundamentals is Work With What You Have , which means that going forward, your spending should be based on the actual dollars you have on hand. Even though you may have started with debt, it's important to avoid adding to that debt by spending money you don’t currently have.

The Pre-Budget Debt Category represents money that wasn't available when you began using Climb. While this debt reflects past spending that wasn't backed by available funds, the goal now is to work towards paying it off. As you budget for this debt over time, you're bringing your finances into alignment with the principle of working with real, available money.

Managing Credit Card Payments While Staying on Budget

When paying off credit card debt in Climb, you’ll need to manage both your pre-existing debt and any new purchases you make during the month. Climb is designed to help you stay on track by ensuring you only budget and spend based on the money you actually have.

Each month, you’ll budget for your regular spending categories, such as Groceries, Fuel, and other necessities. At the same time, you’ll allocate whatever funds you can toward your pre-existing credit card debt. While you may not be able to pay off your entire credit card balance at once, the goal is to gradually reduce the debt over time.

At the end of the month, your total payment to the credit card company will be based on two things: the amount you spent on new purchases using your credit card, and the amount you’ve budgeted to pay down your existing debt. By paying off both your new spending and some of your debt, you’ll avoid adding to your debt while still making progress on reducing it.

You’ll know you’ve paid off your original Pre-Budget Debt when the balance in the Pre-Budget Debt Category is no longer negative. As you budget more toward it over time, the category balance will gradually move toward zero. Once you’ve fully paid off the debt, the category will reflect that, and you can hide it from your budget if you’d like. After this, any payments made to your credit card company will be for purchases categorized under your regular spending categories. Making full payments on these purchases will prevent interest from accruing and help you stay out of debt.

Managing Credit Card Interest

If you carry a balance on your credit card (meaning you don't pay it off in full each month), you may be charged interest. This interest needs to be accounted for to keep your budget and account balance accurate.

Recording Interest

Each time you're charged interest, you'll need to create a new transaction under your credit card account. You can categorize this interest under an existing category (like 'Fees') or create a new one specifically for 'Interest' to track it separately.

Adjusting the Total Balance

This interest transaction will automatically increase your credit card balance in Climb, ensuring that the total account balance stays accurate. Make sure to budget for this interest in the same way you would for any other expense, adding it to the appropriate category.

This way, interest doesn’t go unnoticed, and your budget reflects the true cost of carrying a credit card balance. Tracking this regularly will help you stay on top of your financial goals and avoid surprises.