Your Questions About Lower Debt Ratio

Lizzie asks…

Can credit card companies lower your credit line significantly so that your debt-to-limit ratio is higher?

Can credit card companies lower your credit line significantly so that your debt-to-limit ratio is higher, for no particular reason and without warning?

richmama answers:

Unless you break the rules of your contract they can not. If you do break the rules, by paying late or something like that they may be able to change your credit limit. However, I serioulsy doubt they would. They would just probably raise your rates.

Betty asks…

Why did Jimmy Carter and the DEMOCRAT Congress have the lowest Debt/GDP ratio of any modern President?

Doesn’t that kind of fly in the face of the Neocon claim that Democrats borrow and don’t stimulate business?
Jimmy was himself a retired Naval officer, he was our last true Conservative president.
Love all the cherry picking of everything except Carter’s low Debt, and large job increase.
You guys love talking about this statistic now suddenly! Why not in the past too?

richmama answers:

Cons don’t do facts.


Sandy asks…

What would be a low debt/equity ratio, and a high current ratio?

Looking for numbers here. Want to know what figures to look for and why in my analysis.

richmama answers:

Look for a book called Standard Industrial Classification or SIC. It is published by the Bureau of Standards I think. They give the ratio standards for each industry. Calculate your company ratios and compare them with industry standards which are in SIC.
Also Standard and Poor gives a ratio standared. But then it is only for rating analyisis for default risk.
SIC is a better option. S&P is easier to get. Value Line also gives a comparison chart of comapny ratios and it’s comaprison with industry standards.

As a rule of themb, during economic depression high debt is considered risk and during boom time high stock erodes stock holders wealth.

Chris asks…

Debt consolidation will leave you with a huge debt ratio, and close all your credit cards?

When you consolidate debt, it shows all old debts as being paid, etc, but the one new debt ratio, which is the amount being owed to the consolidation company will be huge. QUESTION: Does It lower the credit score to have a huge debt ratio like this?
OTHER QUESTION: and you also want to have say, 3 credit cards, (3 of them is the number you want to have a good credit profile, right), then the debt consolidation companies close your credit cards or do they not? How does it work

richmama answers:

You can find the answers to your questions here:


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