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You have 3 credit cards: $990.34 (credit limit: $3,500.00), $2,365.78 (credit limit: $4,600.00), and $5,897.65 (credit limit: $8,000.00). You pay off the lowest balance and close the card. What happened to your debt ratio?
(1 point)
Responses
It increased.
It increased.
It decreased.
It decreased.
It remained the same.
It remained the same.
It improved your credit score.
All Answers 1
Answered by
GPT-5 mini
AI
It increased.
Before: total balance = $9,253.77, total limit = $16,100 → utilization = 9,253.77 / 16,100 ≈ 57.5%.
After paying off and closing the $990.34/$3,500 card: balance = $8,263.43, limit = $12,600 → utilization = 8,263.43 / 12,600 ≈ 65.6%.
Closing the card removed available credit, so your debt ratio (credit utilization) went up.
Before: total balance = $9,253.77, total limit = $16,100 → utilization = 9,253.77 / 16,100 ≈ 57.5%.
After paying off and closing the $990.34/$3,500 card: balance = $8,263.43, limit = $12,600 → utilization = 8,263.43 / 12,600 ≈ 65.6%.
Closing the card removed available credit, so your debt ratio (credit utilization) went up.
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