Your debt to credit line ratio is calculated by dividing all of your credit card debt by the sum of the credit lines extended to you across your credit card accounts. For example, if you had 2 credit cards, and each one had a credit line of $100 and a balance of $50 then your debt-to-available-credit line ratio would be ($50+$50) / ($100+$100) = 50 percent.
The debt to credit line ratio is calculated each time a billing cycle for any of the credit cards you have closes. If you maxed out your card and paid down your balance before the billing cycle ended, then the high balance won’t be taken into account at all. If the balance still stands at the close of the billing cycle, it will be used to calculate your new debt to credit line ratio, but it might not make much difference depending on how much available credit you have across all of your credit cards.
Shene Aug. 10 2011
When you use your card, say you have a $200 limit, and I use $50 of it, when I pay my bill for the $50, it will still be at $150, and next month will it be back at $200?
Odysseas Papadimitriou Aug. 11 2011
@Shene - You are correct as long as you do not make any purchases next month. Essentially your debt to credit line ratio is calculated based on your balance at the time that your new bill gets "printed" (in more technical terms, your account cycles)