The core idea
Credit cards are tricky because spending and paying happen at different times. Purpose Budget uses Total Debt mode so you can make spending decisions based on your categories (not your bank balance) and still always know what you can safely pay.
What happens when you make a credit card purchase
When you record a $50 credit card purchase categorized to Groceries, two things happen:
- The Groceries category Activity decreases by $50 (because you spent $50).
- Purpose Budget moves up to $50 into that card’s Credit Card Payment category so the cash is reserved for your future payment.
Why payment categories exist
A payment category is your “reserved cash” for that specific card. It keeps you from accidentally spending money that you’ll need when your credit card bill comes due.
Paying your card
When you pay your card, record a transfer from your checking account to your credit card account. The amount you can pay safely is shown by the available amount in that card’s payment category.
Protected funds (why money stays in payment categories)
In Total Debt mode, once money is moved into a credit card payment category, it stays protected for paying the card. This avoids a common failure mode where someone reduces a budget later and accidentally “steals” money that was already reserved for a card bill.
Refunds and returns
If you return something you bought on a credit card, categorize the refund to the original spending category. Purpose Budget will reverse the reserved amount appropriately so your spending category and payment category stay consistent.
When things go wrong: Unfunded spending
If you spend on a credit card and the category didn’t have enough Available at the time, you create new credit card debt. Purpose Budget flags this as Unfunded.
Next: Unfunded Credit Card Spending (What It Means).
Want the step-by-step version?
The Learn guide includes examples and routines: Credit Cards in Purpose Budget.