What does credit card debt mean?
After passing the bank's audit, the bank will issue a credit card with a certain consumption limit. This credit card account itself is a debt account or an overdraft account, which is a mode of spending first and then repaying; The money you spend, that is, the money you should pay back within the prescribed time limit, is the credit card debt when you settle your account with your card. It's just that even if you don't spend it, the annual credit card fee is an overdraft consumption mode, so this money is also your credit card debt.
Many friends will choose to use interest-free loans from credit cards as their living expenses, invest their wages and earned money in wealth management products, and then pay back the credit cards when the money earned from wealth management arrives, so that they can earn interest in the middle. So the essence of credit card is to reposition your money and make room for you to earn more money.
What does the debt ratio mean?
But many friends are blinded by excessive consumption, only pay attention to consumption and forget to make money. As a result, the more credit cards are borrowed, the deeper the hole is, and finally it can't be filled. This is why the debt ratio of young friends remains high.
The People's Bank of China calculates your credit card debt ratio as follows: the bill has been issued on the credit card billing date/the total credit line of the credit card. Therefore, your credit card debt ratio in the credit report of the People's Bank of China will change dynamically due to different billing dates.
Whether it is debt or debt ratio, it should be controlled within the scope of timely repayment, and don't let the bank blacklist you.