Balance-To-Limit Ratio

A balance-to-limit ratio is the amount of money owed on a credit card compared to (divided by) the current credit limit. Therefore, the ratio is examining what you have charged compared to what you could charge.

Example: Credit card A has a $10,000 limit. Betsy has charged $2,000 to the card. 2,000/10,000 = .20 = 20%. Betsy's balance-to-limit ratio is 20%.

The balance-to-limit ratio is also known as your credit utilization ratio.