Question

Question # 13 said, "You have a credit card that has a balance of $3,589.90 and a credit limit of $5,000" Use this information to answer below
Round any decimals to the nearest penny.

Secured Unsecured
Credit APR APR
Excellent 4.75% 5.50%
Good 5.00% 5.90%
Average 5.85% 6.75%
Fair 6.40% 7.25%
Poor 7.50% 8.40%

Use the table above for interest rate questions.
Using the credit card from question 13, if you have a good credit rating, how much must you pay at the end of the month to get the balance to the acceptable debt ratio percentage?

Answer 1

Assuming the “acceptable” debt ratio is 30% of your credit limit:

- Current balance = $3,589.90; credit limit = $5,000 → current utilization = 3,589.90 / 5,000 = 71.80%.
- Target balance at 30% = 0.30 × $5,000 = $1,500.00.
- Payment required = $3,589.90 − $1,500.00 = $2,089.90.

You must pay $2,089.90 at the end of the month to reach a 30% utilization. (If you meant a different target percent, tell me and I’ll recalc.)