diff --git a/app/models/family/auto_categorizer.rb b/app/models/family/auto_categorizer.rb
index 7e74817ce..f9a83f1f2 100644
--- a/app/models/family/auto_categorizer.rb
+++ b/app/models/family/auto_categorizer.rb
@@ -16,9 +16,16 @@ class Family::AutoCategorizer
       Rails.logger.info("Auto-categorizing #{scope.count} transactions for family #{family.id}")
     end
 
+    categories_input = user_categories_input
+
+    if categories_input.empty?
+      Rails.logger.error("Cannot auto-categorize transactions for family #{family.id}: no categories available")
+      return
+    end
+
     result = llm_provider.auto_categorize(
       transactions: transactions_input,
-      user_categories: user_categories_input,
+      user_categories: categories_input,
       family: family
     )
 
@@ -30,7 +37,7 @@ class Family::AutoCategorizer
     scope.each do |transaction|
       auto_categorization = result.data.find { |c| c.transaction_id == transaction.id }
 
-      category_id = user_categories_input.find { |c| c[:name] == auto_categorization&.category_name }&.dig(:id)
+      category_id = categories_input.find { |c| c[:name] == auto_categorization&.category_name }&.dig(:id)
 
       if category_id.present?
         transaction.enrich_attribute(
diff --git a/app/models/provider/openai.rb b/app/models/provider/openai.rb
index e25361e36..be320e959 100644
--- a/app/models/provider/openai.rb
+++ b/app/models/provider/openai.rb
@@ -54,6 +54,11 @@ class Provider::Openai < Provider
   def auto_categorize(transactions: [], user_categories: [], model: "", family: nil)
     with_provider_response do
       raise Error, "Too many transactions to auto-categorize. Max is 25 per request." if transactions.size > 25
+      if user_categories.blank?
+        family_id = family&.id || "unknown"
+        Rails.logger.error("Cannot auto-categorize transactions for family #{family_id}: no categories available")
+        raise Error, "No categories available for auto-categorization"
+      end
 
       effective_model = model.presence || @default_model