Question

Suppose you have two credit cards. The first has a balance of $415 and a credit limit of $1,000. The second has a balance of $215 and a credit limit of $750. What is your overall credit utilization?

Answer 1

Compute for the total balance:

total balance = $415 + $215 = $630

Then we compute for the total credit limit:

total credit limit = $1,000 + $750 = $1,750

The credit utilization would simply be the percentage ratio of total balance over total credit limit. That is:

credit utilization = ($630 / $1,750) * 100%

credit utilization = 36%