Question

If your monthly net (after-tax) income is $1,500, what should be your maximum amount spent on credit payments? $200

$300

$400

$500

Answer 1

Rule of thumb is you never want more than 20% of your income to go to credit card payments. If your monthly net income is $1,500 to find the amount spent on credit card payments take 20% of $1,500 = $300. $300 is the max amount you should spend on credit payments.