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.
Improving your credit score can help, too. 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.
Best high-limit balance transfer credit cards
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+ can be considered a high credit limit. The highest credit limits are most often seen from more premium cards like the Citi Prestige® Card or 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 14-month, 0 percent introductory APR on both purchases and balance transfers (11.99 percent to 22.99 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
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 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 APRs for balance transfers and purchase. The new Wells Fargo Reflect also comes with a $600 cellphone protection when you use the Reflect to pay phone bills, subject to 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 14.49 percent to 24.49 percent. There’s no annual fee, although a 3 percent balance transfer fee (minimum $5) does apply.
Tips on how to do a balance transfer
Before you gear up to transfer balances, you should know about the most important do’s and don’ts and the steps you can take to boost your chances for approval. The following tips can help ensure your balance transfer goes off without a hitch:
Check your credit score before you apply
The best balance transfer credit cards are mostly available to consumers with good or excellent credit, so it can help to check your credit score before you apply. If you’re right on the cusp of one of these credit ranges, it may be worth taking a little time to improve your score to get access to better credit offers. Balance transfer cards for bad credit also exist but their introductory rates and benefits aren’t nearly as good.
You can also 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.
Know exactly how much debt you have
Make sure you tally up your debts from all of your credit cards before you get started with a balance transfer or apply for a new card. You’ll want to make sure you are able to transfer as many balances as you can while giving preference to debts with the highest interest rates.
Compare top balance transfer cards from each issuer
Spend some time comparing cards that offer 0 percent APRs on balance transfers for a limited time. As you do your research, keep in mind you’ll have to find a balance transfer card with a different issuer than the one with which you currently carry balances.
Keep making payments on all cards until your account balance shows $0
Make sure your balance transfer doesn’t cause undue harm to your credit score. One way to do this is by keeping up with payments on your old cards until all your balances have been transferred and each old account shows a $0 balance.
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.