Do Balance Transfers Increase Your Credit Limit? (2024)

FAQs

Does balance transfer increase credit limit? ›

No, balance transfers do not increase your credit limit. You cannot transfer a balance that exceeds your account's credit limit, and issuers will either reject such a balance transfer request or accept only a partial transfer.

Transferring your debt has its drawbacks. Balance transfer credit cards often have a host of pitfalls that can potentially offset the benefits, including: Fees: Most credit cards have a 3% or 5% balance transfer fee. Temporary 0% APR: The 0% intro offer will eventually expire, and your regular APR may be 20% or higher.

A balance transfer can improve your credit over time as you work toward paying off your debt. But it can hurt your credit if you open several new cards, transfer your balance multiple times or add to your debt.

There are a number of factors that go into determining what transfer amount you're approved for with a balance transfer credit card, including your credit scores, income, employment status and credit history. As such, there's no real way to determine how much you'll be approved for until you actually apply for a card.

As many as you want, as long as you stay below your credit limit. The best balance transfer credit cards give you between 60 and 120 days to transfer balances in order to qualify for the 0 percent intro APR offer, so try to transfer and pay down your balances as quickly as possible.

Balance transfer credit cards typically require good credit or excellent credit (scores 670 and greater) in order to qualify.

If you can't repay your debt in the promotional period, are nearing the finish line on total debt repayment or are planning on applying for major financing soon, a balance transfer may not be a good move.

The problem is that transferring a balance means carrying a monthly balance. Carrying a monthly balance by not paying off the minimum amount due each month—even one with a 0% interest rate—can mean losing the card's introductory APR, its grace period and paying surprise interest on new purchases.

It may sound like a good idea to keep transferring your balance to a new card to avoid paying interest altogether. However, repeatedly opening new credit cards and transferring balances to them can damage your credit scores in the long run.

Closing a credit card after transferring the balance can negatively impact your credit scores by increasing your credit utilization rate. It's best to leave the account open, even if you don't use it very often. At Experian, one of our priorities is consumer credit and finance education.

What happens to an old credit card after a balance transfer? ›

Your old credit card will remain open after the balance transfer is complete, and you can decide whether you want to keep using it, stop spending on it, or close your account.

A balance transfer can be a great way to save money on interest and get out of debt. But it can also be a slippery slope into more debt if you're not careful.

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.

Paying your credit card and other bills on time every month. Making more than the minimum monthly payment and paying down existing balances where possible. Lowering your credit utilization rate. Settling any existing collections accounts.

It's important to know that you won't be able to do a balance transfer for more than your credit limit, and that any balance transfer fees you're charged will count toward hitting your credit limit.

Avoid transferring a balance up to the new card's full credit limit. If you transfer a balance that either maxes out your new card or gives it a really high utilization rate, that could hurt your credit score. A maxed-out card can lower your score by more than 100 points, according to myFICO.

No. You will need to call your credit card issuer and ask for a credit limit increase.

The principal amount of your debt remains the same. However, the new account allows you to save money on interest payments moving forward. Some credit card companies, though not all, charge a fee for balance transfers.

Credit card balance transfers are often limited to an amount equal to the account's credit limit. You typically can't transfer a balance greater than your credit limit—and you won't know your credit limit until you're approved for the account.