How much credit card debt can you have?
October 14th, 2009
Jody M asked:
Is there a percentage of income that credit card companies look at, like income/debt ratio for homes?
Is there a percentage of income that credit card companies look at, like income/debt ratio for homes?
depends on the company card u have
its unlimited. they dont look at your income, just your credit score.
This is one of the problems creditors are just starting to address. Accept at the time of application, credit card issuers have not looked at your income or your debt to income ratio. Instead, they give you credit line increases based on credit scores and credit history. It appears this concept is changing now.
for 20,000 in income they give you a credit line in the hundreds. For an annual income in the 40,000s your looking at lower thousands of credit line
I do not have any credit cards but I do have student loans totaling $8000.00 I had to get student loans once my tax bracket increased.
You ask how much debt can you have? That would depend on how wealthy you are. If you are an average person, any total debt above 33% of your total income (for all outstanding debt), I’d say is not good position to be. Take my word for it, credit card debt is a trap you should avoid if possible. Do all you can to rid yourself of the plastic!
Use only one card for emergenies, if you must. Save your money for the things you need. The interest on the most plastic will kill you.
If the interest you are paying is over 10%, cut the plastic to pieces.
Hey i advice you to settle your debts before you go for purchasing a Home.
And the ratio depends on the company how it calculates.
There are many companies online providing such kind of settlement services which are good for you.
There are two parts to this answer that are equally important. One is your income vs. your expenses. Obviously, the more money you make and the less expenses that you have, the more you can afford on credit card. The second part involves your credit rating: the higher your credit score is, the lower your interest rate will be.
Financial experts recommend keeping your account balances less than 50% of your available credit to maintain a good credit rating.
The debt-to-income ratio is simply a measure of your debt load compared to income. It’s basically the total debt you have in the form of mortgages, loans, and credit card debt compared to your income. Generally, with credit card issuers, you’ll want to keep the ratio below 36%.