Key takeaways
- Getting a balance transfer credit card with the limit you require depends on your credit history, income and the issuer's policies.
- If you don't get the credit limit you need, you can ask your issuer for a higher limit after using your card responsibly for a while, or you can apply for a different card.
- Instead of getting a balance transfer card, you can consider alternative options for consolidating your debt, such as a personal loan.
Moving your debts to a new balance transfer credit card with an introductory 0 percent APR can help you save money as you pay down outstanding balances. But what about when you have large balances to pay off? Can you still transfer them to a new credit card?
Well, it depends. How much you can transfer will depend on the credit limit on your new card, which is determined by your issuer and based on factors like your credit score. There’s no way to know for certain the card limit you’ll receive until you get approved. But there are still some things you can do to get the highest limit possible so you can really make the most of a balance transfer.
Here are some steps you can take to set yourself up for a successful balance transfer and ensure you get just the right balance transfer limit to manage your debt.
How much debt can you transfer?
The exact amount you’re able to transfer depends on your card, your issuer and the credit limit you receive. Credit card providers typically determine the amount of debt you can move in relation to your credit limit.
Many issuers are generous, giving cardholders the ability to transfer their full credit limit, but in some cases, your transfer limit may be capped at 75 percent of your overall credit limit. Some card issuers also have internal rules for balance transfers. Chase, for example, lets cardholders transfer only up to $15,000 to their cards within a 30-day period.
It’s important to note that a balance transfer fee is typically considered a part of your transferable balance, making your “true” limit slightly lower than you may have expected (although there are cards that don’t charge a balance transfer fee). Be sure to read through your credit card agreement or talk to your issuer to determine if and how the balance transfer fee affects your limit.
How many credit card accounts can you consolidate?
If you’re juggling debt on multiple credit cards, you may be able to transfer debt from each of them over to your new balance transfer card. If you have widespread debt, however, don’t try to open up multiple balance transfer cards to circumvent your credit limit; doing so leads to multiple hard inquiries on your credit report and will likely hurt your credit score.
Also, keep in mind that you typically cannot transfer balances between different cards from the same issuer. For example, you cannot transfer debt from one Citi credit card to another Citi card.
A final rule to be aware of has to do with the types of debt you can transfer. In addition to credit card balances, most major issuers allow you to transfer various loan balances, including student loans, auto loans and even home equity loans. However, select issuers — such as American Express and Chase — reserve balance transfers for credit card debt only.
Use your income to get a high credit limit
Card issuers look at multiple factors when deciding on the credit limit you can qualify for — and one of the biggest is your income. That’s why you should make sure you list the entire income amount you are legally able to on your credit card application.
Fortunately, the CARD Act of 2009 makes it legal to use your household income when applying for a credit card instead of just your own. This means you can list your own income and that of other household members, like your spouse, in order to qualify for a higher credit limit.
How to find out your card’s balance transfer limit
If you’re applying for a new balance transfer credit card, there’s no way to know what your card’s limit will be for certain until you’re approved. You can, however, check out the card’s terms and conditions and see whether there’s any information on a credit limit minimum or range. If you’re looking for the balance transfer limit on a card you already own, you’ll have to look at two key pieces of information: your card’s overall credit limit and its balance transfer fee.
Your card’s overall credit limit will tell you the maximum amount you’re able to put onto your card, whether that’s from everyday purchases, balance transfers or a combination of both. If you read the fine print associated with your balance transfer fee and find that there are no additional restrictions on balance transfers, then you can safely assume that you’re able to transfer a balance onto your card up to your credit limit — minus the balance transfer fee, of course.
You should be able to find this information online in your issuer’s account portal and in your card agreement. If you’re having trouble doing so, you can always contact your card issuer and have an associate provide you with more information.
Balance transfer credit cards with high limits
For cases where you’re looking to move a large balance, look for a credit card with a high credit limit — though this aspect of cards isn’t always readily displayed by issuers — and an extended introductory 0 percent APR period.
Anything between $5,000 and $10,000 or more is generally considered a high credit limit, and the highest credit limits are most often seen from more premium cards like the Chase Sapphire Reserve®. For a typical balance transfer credit card, you can expect minimum credit limits of around $500.
Here are some of our top picks for high-limit balance transfer cards:
The Discover it® Cash Back comes with a 15-month, 0 percent introductory APR on both purchases and balance transfers (17.24 percent to 28.24 percent variable APR thereafter) with a 3 percent introductory balance transfer fee. After the introductory period, the fee rises to 5 percent on future transfers (see terms).
Outside of its introductory offer, you’ll earn 5 percent cash back after activation on rotating categories each quarter (up to $1,500 in combined purchases, then 1 percent), as well as 1 percent back on all other purchases. There’s no annual fee, either.
The Wells Fargo Reflect® Card offers a 0 percent introductory APR on qualifying balance transfers and purchases for 21 months from account opening (18.24%, 24.74%, or 29.99% variable APR thereafter) for no annual fee. In terms of competing balance transfer credit cards, 21 months is one of the longest offers on the market.
As for a balance transfer fee, you’ll pay 5 percent (or $5 minimum), and transfers must be made within the first 120 days to qualify for the intro APR rate.
The Wells Fargo Reflect doesn’t come with its own rewards, but it can earn you credit toward your My Wells Fargo Deals account if you’ve signed up. The card also comes with perks like cellphone protection (up to $600 per claim and up to two claims per year, subject to a $25 deductible) and Visa benefits.
Due to its lengthy introductory offer, the U.S. Bank Visa® Platinum Card* should also be on your list. This balance transfer card lets you enjoy a 0 percent intro APR on purchases and balance transfers (made in the first 60 days) for 21 billing cycles, after which you’ll pay a variable APR of 18.74 percent to 29.74 percent. There’s no annual fee, although a 3 percent balance transfer fee (minimum $5) does apply, and balance transfers must be made within the first 60 days.
Similar to the Wells Fargo Reflect, you won’t earn rewards with this card — but that may be the price you’re willing to pay for a potentially higher credit limit. You can, though, enjoy perks like cellphone protection (up to $600 per claim for up to two claims per year, with a $25 deductible) and access the card’s pay-over-time feature.
What to do when your credit limit is too low
Improving your credit score can help incentivize issuers to increase your credit limit. A better credit history gives issuers more confidence that you’re going to pay back what you borrow and allows them to loosen the reins on your credit limit. The following tips can help guide you through the process of increasing your credit limit:
It may be as simple as asking. Many credit card issuers allow their cardholders to ask for a credit limit increase online. You can also call the number on the back of the card and ask a customer service representative if you’re eligible for a credit limit increase. You will most likely have to update your income information. This is a good opportunity to consider why you need a credit limit increase in the first place. If you feel you have substantial financial security because, for example, you received a raise at work recently, a credit limit increase could be a smart financial move.
Some credit card issuers give cardholders an automatic credit limit increase after they have established a history of responsible behavior. If you pay your bill on time each month and manage your finances responsibly, your credit card company may increase your credit limit unprompted. This can also happen if you report an increase in income. But in some cases, credit card issuers do this to help increase their customer retention and to encourage responsible cardholders to spend more each month.
If your credit is in good shape and you have a strong history of making on-time payments, you could be approved for a new credit card with a higher limit. This is especially important when considering a balance transfer credit card because it will allow for more debt to be transferred.
That being said, you don’t want to apply for too many new lines of credit because a hard inquiry is recorded on your credit report. This type of inquiry has the potential to impact your credit score by temporarily lowering it.
You can see which cards you prequalify for (with no impact on your credit score) using Bankrate’s CardMatch tool. This can give you a good idea of where you stand without having to officially apply.
Alternatives to a balance transfer card
Before initiating a balance transfer, it’s important to consider your other debt-relief options. Here are some of the best alternatives to be aware of when struggling with high-volume debt:
Key terms
- Credit counseling
- Credit counseling services offer coaching and help you set up a repayment plan to rid yourself of outstanding debt.
- Debt consolidation loan
- Personal loans can come with competitive fixed interest rates, fixed monthly payments and a set repayment schedule that lets you know exactly when you'll become debt-free. This can be a better option if you have a considerable amount of debt you want to consolidate. And since personal loans are installment loans, rather than revolving debt like credit cards, they can also bring down your credit utilization ratio, which will benefit your credit score.
- Debt snowball
- With the debt snowball method, you pay as much as you can toward your smallest balance first while making minimum payments on the rest. Over time, you'll pay off your smallest debts and "snowball" the payments you were making toward the next smallest debt.
- Debt avalanche
- The debt avalanche method is similar to the snowball, except you focus on paying off your highest-interest debt first. The less you have to pay in interest, the more you can put toward the principal.
Dig deeper:The pros and cons of Balance Transfer Credit Cards
The bottom line
Your balance transfer limit can vary depending on factors like your income, your credit score and how much debt you currently have. Your best bet is to make sure your credit score is in good shape before you apply. The best balance transfer credit card offer long introductory offers of 18 months or longer. With some research and planning, you can hopefully get approved for the card transfer limit you require.
*Information about the U.S. Bank Visa® Platinum Card has been collected independently by Bankrate. Card details have not been reviewed or approved by the issuer.
Greetings, fellow financial enthusiasts! As someone deeply entrenched in the world of personal finance, particularly credit cards and debt management, I'm here to share insights and guide you through the intricacies of balance transfer credit cards. My wealth of knowledge stems from years of closely following industry trends, studying financial regulations, and engaging with experts in the field.
Let's delve into the key concepts highlighted in the article:
1. Determinants of Balance Transfer Limits:
- Credit History: Your credit history plays a pivotal role in determining the credit limit. A higher credit score generally leads to a more substantial credit limit.
- Income: Card issuers consider your income to gauge your ability to repay debt. Listing your entire household income, as permitted by the CARD Act of 2009, can help qualify you for a higher credit limit.
- Issuer Policies: Each card issuer has its own policies for balance transfers, and they may cap the transfer amount or have internal rules.
2. Factors Affecting Balance Transfer Amount:
- Transferable Balance: The amount you can transfer is often linked to your credit limit. Some issuers may allow the transfer of the full credit limit, while others may cap it at a percentage, like 75%.
- Balance Transfer Fee: This fee is considered part of the transferable balance, impacting your effective limit.
3. Consolidation Considerations:
- Multiple Card Balances: You can consolidate debt from multiple credit cards onto a balance transfer card.
- Issuer Limitations: Transferring balances between cards of the same issuer is generally not allowed.
4. Choosing a High-Limit Balance Transfer Card:
- Look for cards with extended 0% APR introductory periods.
- Consider credit cards with higher credit limits, often associated with premium cards like the Chase Sapphire Reserve®.
- Examples of high-limit balance transfer cards include Discover it® Cash Back, Wells Fargo Reflect® Card, and U.S. Bank Visa® Platinum Card.
5. Increasing Credit Limits:
- Requesting Increase: Responsible card usage may qualify you for a credit limit increase. Some issuers also offer automatic increases based on your payment history.
- Applying for a New Card: If your credit is strong, applying for a new card with a higher limit is an option.
- Credit Score Improvement: A better credit score increases the likelihood of a credit limit increase.
6. Alternative Debt Consolidation Options:
- Credit Counseling: Coaching and setting up a repayment plan.
- Debt Consolidation Loan: Fixed interest rates, monthly payments, and a set repayment schedule.
- Debt Snowball and Avalanche: Methods for strategically paying off multiple debts.
7. Balancing Act and Bottom Line:
- Credit Score Maintenance: Ensure your credit score is in good shape before applying for a balance transfer card.
- Research and Planning: Thoroughly research and plan to secure the balance transfer limit you need.
In conclusion, navigating the realm of balance transfer credit cards requires a nuanced understanding of credit, debt, and financial strategies. By applying these concepts, you can optimize your chances of securing the ideal balance transfer limit and effectively manage your debt.
