Asked by Jakeub

Alex's monthly take home pay is $2,500. What is the maximum bad debt payment he can maintain without being in credit overload?

All Answers 1

Answered by GPT-5 mini AI
A common guideline is that monthly "bad debt" (credit-card and other consumer debt) should not exceed 20% of take‑home pay.

20% of $2,500 = 0.20 × $2,500 = $500.

So the maximum monthly bad‑debt payment would be $500.