Question

You have a $5,000 limit on your credit card. What is the largest balance you should carry on this card to maintain an acceptable debt ratio? Recall that your debt ratio should never exceed 50% of your limit

Answer 1

Amount of balance maintain = $2,500

Explanation:

Given:

Limit of credit card = $5,000

Debt ratio = 50%

Find:

Amount of balance to maintain

Computation:

Amount of balance to maintain = Limit of credit card × Debt ratio

Amount of balance to maintain = $5,000 × 50%

Amount of balance to maintain = $2,500