# How to get the right formula

1. ## How to get the right formula

Hello IAM new to this forum !!

My question is how do I get the formula to automatically let me know how much utilization of my credit debt do I need to pay down to get a low utilization.

To be more clearer.....I made a spread sheet of list of all my credit cards with there balances and available credit to determine the credit ratio. What IAM looking for is how to make a column on my spreadsheet that will calculate and let me know how much to pay down to reach my goal. Am I making any sense to anyone...lol plz help

2. ## Re: How to get the right formula

Okay, I'll bite.

This does not make much sense and I think you are mixing terms. I assume utilization of a credit card is [balance on card]/[card limit]. I am not sure how that is tied to a credit ratio, which is technically defined as your debt divided by your income (which you don't mention above).

I THINK you are considering 'utilization' and 'credit ratio' to be synonymous. What is also throwing me off is that you have a column for 'available credit' which I define as [card limit]-[balance on card]. I'm not sure what [balance on card]/[available credit] would show (which your text above implies you are calculating).

I THINK you want to calculate your [balance on card]/[card limit] for each card (let's call this utilization). Then you want to perform some analysis to see what you need to do to achieve a specific utilization across all of your cards. So, if you want to reach 5% utilization, what cards do you need to pay off to reach that goal?

The problem is that this has many solutions. Here are two simple examples:
1) Calculate the goal for each card you have (i.e. 5%) and just have each card's balance match that goal. The problem here is if some cards are already below your goal of 5%, you'd have to carry that 'credit' on to other cards.
2) Probably the simplest is to keep zeroing out your remaining balance until you can reach 5% and then just subtract whatever you need to do. You'd want to pay off the cards with the highest APR/penalties first.

Example for the second solution - Note your data must start on row 2 since the equation needs an empty 'top' cell for column C:
Column A has your balance for each card
Column B has your card limit for each card
Column C will have this equation:
=MEDIAN(SUM(\$A\$2:\$A\$5)-SUM(\$C\$1:C1),0,MIN(A2,SUM(\$A\$2:\$A\$5)-SUM(\$C\$1:C1)-rate*SUM(\$B\$2:\$B\$5)))

rate is the percentage you want to get to, e.g. 5%.

3. ## Re: How to get the right formula

Hi, welcome to the forum

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