Question

4. Suppose you have two credit cards. The first has a balance of $410 and a credit limit of $1,000. The second has a balance of $510 and a credit limit of $1,000. What is your overall credit utilization?

Answer 1

Hello!

To calculate your credit card utilization, we must divide your credit card balance by your credit card limit, and then multiply that by 100.

CREDIT CARD 1:

410 ÷ 1,000 = 0.41

0.41 × 100 = 41%

Utilization: 41%


CREDIT CARD 2:

510 ÷ 1,000 = 0.51

0.51 × 100 = 51%

Utilization: 51%