Here's a situation I've always wondered:
Suppose Alice has a $1500 Credit Card and wants to buy a $2000 trinket from Bob. Bob agrees to allow Alice to make 2 $1000 installments on a NET 30 term. Alice buys the trinket, making the first payment. She waits for the transaction to post then pays it immediately. The following week, she makes the second payment, then pays that off immediately. She doesn't pay any of her other expenses on the card until the end of the month when she gets her statement (suppose at the end of the month it's $500)
What is her CC utilization for the month in this scenario?
Is it
- 33% (500/1500, her unpaid expenses as of the statement date)
or
- 167% (2500/1500, the total amount she put on her card that month divided by her limit)?