How to Spread Debt Over Multiple Cards

How to Spread Debt Over Multiple Cards
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If you have multiple credit cards, you’ve got a number of ways to amass debt. How you use more than one credit card can affect your credit score because the credit bureaus look at the ratio between credit limits and balances. One credit card charged close to the limit could give credit bureaus a cause for concern, says Lexington Law Firm, a firm specializing in consumer law. Your overall credit score will benefit from spreading debt out over several different credit cards.

Calculate your credit utilization percentage for each credit card by dividing the balance by the credit limit. For example, if a store credit card has a balance of $125 and a limit of $1,000, divide 125 by 1,000 to get .125. Multiply this answer by 100 to get the utilization percentage for this credit card. For this card, the utilization percentage would be 12.5 percent.

Figure out your overall credit utilization percentage – sometimes called the “aggregate utilization.” Add each balance for each credit card together to arrive at your total revolving debt. Add each credit limit for each credit card together to get your total revolving credit limit. Divide your total revolving debt by the total credit limit to get your overall credit utilization percentage. For example, if you have three credit cards with balances of $125, $200 and $95, your total revolving debt would be $420. If the credit limits of each card are $1,000, $600 and $500, your total credit limit would be $2,100. Divide 420 by 2,100 to get .2. Multiply .2 by 100 to get your overall utilization percentage – in this case 20 percent.

Pay down your credit balances to bring each card down below 30 percent utilization, advises the Experian credit bureau. Using the same example, the second credit card with a balance of $200 and a limit of $600 has a utilization ratio of 33 percent. Pay down this balance so that it’s less than $170 to bring your utilization ratio comfortably below the recommended 30 percent threshold, or $180.

Calculate each credit card utilization ratio regularly to ensure you keep your individual ratios of credit cards below 30 percent.

Strive for a utilization ratio of around 7 percent, recommends credit expert John Ulzheimer, writing for Recommended utilization ratios vary according to different experts, but people with the highest credit scores have overall utilization ratios of 7 percent.


  • When deciding whether to pay off one credit card in full or more than one credit card in part, pay down more than one unless you have one credit card that is close to the limit, advises Experian. Continue to pay off all balances until you eliminate the debt, then try to pay your credit card balances in full each month.