Assuming all cards have a [tex]$1000 credit limit, which person would have the lowest credit utilization ratio?
Tatiana has 10 cards and carries a $[/tex]500 balance total
Debra has one card and carries a $100 balance on it
Priyanka has 10 cards and each of them is at the credit limit
Harriett has one card that is at the credit limit



Answer :

To determine which person has the lowest credit utilization ratio, let's follow these steps:

1. Understand the Problem:
We have four individuals, each with a certain number of credit cards and a certain balance. The credit utilization ratio is calculated as:

[tex]\[ \text{Credit Utilization Ratio} = \frac{\text{Total Balance}}{\text{Total Credit Limit}} \][/tex]

2. Establish the Credit Limit per Card:
Each credit card has a [tex]$1000 credit limit. 3. Calculate the Total Credit Limit and Utilization Ratio for Each Person: - Tatiana: - Number of cards: 10 - Total balance: $[/tex]500
- Total credit limit: [tex]\( 10 \times 1000 = 10000 \)[/tex]
- Utilization ratio: [tex]\( \frac{500}{10000} = 0.05 \)[/tex]

- Debra:
- Number of cards: 1
- Total balance: [tex]$100 - Total credit limit: \( 1 \times 1000 = 1000 \) - Utilization ratio: \( \frac{100}{1000} = 0.10 \) - Priyanka: - Number of cards: 10 - Total balance: \( 10 \times 1000 = 10000 \) - Total credit limit: \( 10 \times 1000 = 10000 \) - Utilization ratio: \( \frac{10000}{10000} = 1.00 \) - Harriett: - Number of cards: 1 - Total balance: $[/tex]1000
- Total credit limit: [tex]\( 1 \times 1000 = 1000 \)[/tex]
- Utilization ratio: [tex]\( \frac{1000}{1000} = 1.00 \)[/tex]

4. Compare the Utilization Ratios:
- Tatiana: 0.05
- Debra: 0.10
- Priyanka: 1.00
- Harriett: 1.00

5. Determine the Lowest Utilization Ratio:
Among the given individuals, Tatiana has the lowest credit utilization ratio at 0.05.

Conclusion:
The person with the lowest credit utilization ratio is Tatiana with a ratio of 0.05.