Question

You have four credit cards. Each has a balance of $450.00, but their credit limits are $800.00, $1,200.00, $1,300.00, and $1,500.00. Paying off and closing which card would decrease your debt ratio?
(1 point)
Responses

the $1,500.00 limit card
the $1,500.00 limit card

the $800.00 limit card
the $800.00 limit card

the $1,200.00 limit card
the $1,200.00 limit card

the $1,300.00 limit card

Answer 1

The $800.00 limit card.

Reason: Current utilization = 1,800 / 4,800 = 37.5%. If you pay off and close the $800 card your balances = 1,350 and total limit = 4,000, so utilization = 1,350 / 4,000 = 33.75% (a decrease). Closing any larger‑limit card raises or leaves unchanged the utilization.