Key takeaways
- The amount you can transfer with a balance transfer credit card depends on your credit limit, which is determined by factors like your credit score and income as well as the issuer’s policies.
- You can transfer debt from multiple credit cards to a balance transfer card, as long as it fits within your credit limit.
- 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.
It’s no secret that credit card holders are looking for ways to manage skyrocketing debt balances. As of January 2024, more than 2 in 5 (44 percent) of American credit cardholders carry a credit card balance from month to month, according to Bankrate’s 2024 Chasing Rewards in Debt survey — down from 49 percent of cardholders in November 2023, but still up from 39 percent in 2023. With the average credit card interest rates standing more than 20 percent, it’s easy to see why transferring the most credit card debt possible to a low- or zero-interest card is critical.
Balance transfers can sometimes feel like a complicated process of finding a credit card with a high enough limit and wondering whether to transfer one existing balance or all of them. It becomes easier to make the right decision when you know what the balance transfer limits are.
When you have a large single balance or multiple smaller balances to pay off, you may be able to use the zero percent introductory APR of a balance transfer credit card to help you demolish chunks of debt and save money on interest. How much you can transfer depends on the credit limit on your new card, which your card issuer determines with factors like your credit score and income. You won’t know what your balance transfer credit card limit is for certain until you get approved, but you can still implement some tools and tips to make the most of it.
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. Card issuers typically have rules surrounding the amount of debt you can transfer 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 credit card issuers have their own internal rules for balance transfers. For example, Chase allows cardholders to transfer up to $15,000 to their cards within a 30-day period. It’s important to note that a balance transfer fee is usually considered part of your transferable balance, so your actual limit may be slightly lower than expected unless you have a card with no balance transfer fee.
For instance, if you have a card with a $5,000 balance transfer limit and a 3 percent balance transfer fee, the most you can transfer is about $4,850. This amount plus the fee brings your total to $4,495.50, keeping you under the limit. Make sure to review your credit card agreement or speak with your issuer to understand how the balance transfer fee affects your limit.
You can consolidate as many credit card accounts and balances as your credit limits and card issuers allow. There are two main ways to consolidate credit cards: by transferring debt from multiple balances onto a balance transfer card or by merging two credit card accounts into one.
When you transfer a balance from one credit card to a balance transfer card, the original card remains open but with a $0 balance. If you consolidate credit card accounts, one card will close entirely, and the other will absorb its balance and credit limit if permitted by the issuer.
If you have multiple credit cards, you can transfer debt from each to your new balance transfer card as long as you stay within the credit limit. Be cautious about trying to open multiple balance transfer cards to exceed your limit, as this can harm your credit score. Additionally, be aware of the types of debt you can transfer and that you typically cannot transfer balances between cards from the same issuer.
To consolidate multiple accounts into one, contact your credit card issuer to inquire about their consolidation rules. Specify that you want to maintain your credit limit when consolidating to avoid impacting your credit utilization ratio.
You can determine your card’s balance transfer limit by pre-qualifying before applying, checking the card’s terms and conditions, or contacting your card issuer for more information. Your income is a significant factor in determining your credit limit. When searching for a high-limit credit card, it’s crucial to disclose your total household income on your credit card application to meet legal requirements. The CARD Act of 2009 allows you to use your household income, including your spouse’s income, when applying for a credit card to qualify for a higher credit limit.
If your credit limit is too low, improving your credit score can encourage issuers to increase it. A better credit history shows issuers that you’re reliable in repaying borrowed funds, prompting them to raise your credit limit. Here are some steps to help you increase your credit limit:
1. **Call Your Issuer**: Reach out to your credit card issuer to inquire about a credit limit increase. Many issuers allow online requests or contacting customer service. Ensure your income information is up to date before requesting an increase.
2. **Keep an Eye Out for Automatic Increases**: Some credit card issuers automatically increase credit limits for responsible cardholders. Paying bills on time and managing credit effectively can lead to a higher credit limit without requesting it.
3. **Apply for a New Card**: If your credit is strong and payment history is good, applying for a new credit card with a higher limit could be an option. Consider a balance transfer card for more debt transfer space.
Your balance transfer limit depends on factors like income, credit score, and current debt. Ensure your credit score is healthy and include all relevant household income in your application for the best chance of approval. The top balance transfer credit cards offer extended 0 percent APR periods, making thorough research and planning essential for securing the desired transfer limit.
In conclusion, be transparent about your income, manage your credit responsibly, and explore different options to increase your credit limit effectively.