credit utilization ratio

American  

[kred-it yoot-l-i-zey-shuhn rey-shoh, rey-shee-oh] / ˈkrɛd ɪt yut lˌɪˈzeɪ ʃən ˌreɪ ʃoʊ, ˌreɪ ʃi oʊ /

noun

Finance.

1. the total amount of outstanding charges on a credit card compared to the card’s spending limit, expressed as a percentage calculated by dividing the balance due by the spending limit.

   A high credit utilization ratio, especially above 50%, often indicates that a cardholder may be spending beyond their financial means.

---

Etymology

Origin of credit utilization ratio

First recorded in 1985–90

Example Sentences

It’s possible you won’t get a high-enough ceiling to handle your project — and even if you do, adding a large new expense to a credit card could hike your credit utilization ratio, which also has consequences.

From Seattle Times

Also, the balance transfer could alter your credit utilization ratio, which can negatively affect your credit score.

From Washington Post

“It should lower your overall credit utilization ratio because you have more credit, but also you’re paying down your balance more quickly,” Rossman said.

From Washington Post

The more credit you have available to you, the lower your credit utilization ratio is.

From Slate

The cost of the purchase may also drive up your credit utilization ratio, which could affect your credit score.

From Seattle Times