Moving your debts to a new balance transfer credit card with a 0 percent introductory 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?
It depends. How much you can transfer will depend on the credit limit on your new card, which is determined by your issuer with your credit history and other factors in mind. 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 to pay off your high balances.
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 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 the balance transfer fee is often considered a part of your transferable balance, making your “true” limit slightly lower than you may have expected. 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 may hurt your credit score.
Also keep in mind that, generally speaking, you 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.
How 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.
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+ is generally considered a high credit limit. The highest credit limits are most often seen from more premium cards like the Chase Sapphire Reserve®. For your typical balance transfer credit card, you can expect minimum credit limits of around $500.
Here are a couple of Bankrate’s top picks for high-limit balance transfer cards:
Discover it® Cash Back
The Discover it Cash Back comes with a 15-month, 0 percent introductory APR on both purchases and balance transfers (12.74 percent to 23.74 percent variable APR after) with a 3 percent introductory balance transfer fee. After the introductory period, the fee rises to 5 percent on future transfers (see terms).
Though not explicitly stated by the issuer, rumored credit limits for the Discover it Cash Back sit above $10,000. According to Discover, if you’re not happy with the credit limit you receive, ask for a higher limit after a few months of responsible card usage.
Wells Fargo ReflectSM Card
The Wells Fargo Reflect offers an 18-month, 0 percent introductory APR on qualifying balance transfers and purchases from account opening (12.99 percent to 24.99 percent variable APR thereafter) for no annual fee. That intro period extends to up to 21 months when cardholders make on-time payments during the intro and extension periods.
What’s more, the intro introductory period is six to nine months longer than competing cards that offer 0 percent intro APRs for balance transfers and purchases. The new Wells Fargo Reflect also comes with up to $600 of cellphone protection when you use it to pay phone bills each month (up to $1,200 yearly coverage across two potential claims, minus a $25 deductible).
U.S. Bank Visa® Platinum Card
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 0 percent intro APR on purchases and balance transfers for 20 billing cycles, after which you’ll pay a variable APR of 15.24 percent to 25.24 percent. There’s no annual fee, although a 3 percent balance transfer fee (minimum $5) does apply.
Tips to get approved for a higher credit limit
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:
Call your credit card issuer
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.
Look for automatic increases
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.
Apply for a new card
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 lowering it temporarily.
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 vital to consider your other debt-relief options. Here are some of the best alternatives to be aware of when struggling with high-volume debt:
- Credit counseling: These 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.
- Debt snowball: With the debt snowball, 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.
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 and look for a balance transfer card with long introductory offers. With some research and planning, you can hopefully get approved for the card transfer limit you require.