1. What is Credit Card Usage?

Credit card usage (or credit utilization ratio) is the percentage of your available credit that you're currently using. It's a key factor in calculating your credit score and represents how much of your credit limit you're utilizing.

2. How Does the Calculator Work?

The calculator uses the credit card usage formula:

Where:

• \( Balance \) — Current credit card balance (USD)
• \( Limit \) — Total credit limit (USD)

Explanation: The equation calculates what percentage of your available credit you're currently using.

3. Importance of Credit Card Usage

Details: Credit utilization makes up 30% of your FICO credit score. Keeping your usage below 30% is generally recommended, with the best scores typically going to people using less than 10% of their available credit.

4. Using the Calculator

Tips: Enter your current credit card balance and total credit limit in USD. Both values must be valid (balance ≥ 0, limit > 0).

5. Frequently Asked Questions (FAQ)

Q1: What's a good credit utilization ratio?
A: Below 30% is good, but for optimal scores, aim for under 10%. The lower your utilization, the better it is for your credit score.

Q2: Does this calculator work for multiple cards?
A: This calculates usage for a single card. For overall utilization, sum all balances and all limits before calculating.

Q3: How often should I check my credit utilization?
A: Monthly, since credit card companies typically report balances to bureaus once per month.

Q4: Does paying off my balance multiple times per month help?
A: Yes, making multiple payments can keep your reported utilization low if your card reports the balance mid-cycle.

Q5: Does a 0% utilization help my score?
A: While 0% utilization is better than high utilization, having a small (1-9%) utilization is often slightly better for your score than 0%.