What to Do if Your Balance Transfer Credit Limit is Too Low

May 10, 2019

By Sherry Keyles

In order to eliminate your credit card debt, you decided a balance transfer credit card was your best option. Your issuer approves your application but you learn the credit limit is lower than the debt amount you were planning to transfer.

Why is the Credit Limit Lower than the Offer?

Issuers review a number of factors to determine the approved balance transfer amount including credit scores (most issuers require good to excellent credit and a FICO credit score above 700), income, employment status, credit history, among others. Even if your credit score matches the required score, you still may not get approved for a higher credit limit.

Is There Anything I Can Do to Raise the Limit?

The reason to move your high-interest debt to a balance transfer card with a 0% APR introductory offer is to save money on interest while you pay down your balance. Not being approved for the full debt amount is disappointing but you do have some options including:

Call the issuer to request a higher credit limit

You might not think asking for a higher credit limit will work since they just rejected it but a phone call never hurts. By calling the issuer, you can find out why they made the decision on your credit limit and give you a chance to explain why you believe you should receive a higher limit. If your entire balance is on one card, it demonstrates your loyalty to the issuer.

Make this call before you transfer any part of your debt to the new card so you won’t need to pay an additional balance transfer fee on the second transfer. Follow these steps when calling the issuer:

  • Be clear and friendly when speaking with the client service representative.
  • Have the following information:
    • Credit line you were approved for on the card.
    • Exact dollar amount of the additional credit you are requesting.
    • Reason you need higher credit line. Be very specific about what you plan to do with the balance transfer (i.e., pay off your debt faster with it in one place).
    • If there were any changes to you your financial situation since you applied for card (higher income, error discovered in credit report)
  • Be patient and set aside some time for the call as you may need to speak with several different people.

There’s no guarantee they issuer will raise the limit but it’s worth the phone call.

Pay down your balance on both cards

If you don’t get approved for a higher limit even after asking the issuer, you can transfer the approved amount to the new card to take advantage of the 0% APR period. Since you will be saving interest on the transferred amount, leave the remaining balance on the old card and focus on paying both balances off. Make sure to pay off the amount on card with the  0% APR offer before the promotion card before that card's actual interest rate kicks in.

Ask your existing credit card issuer for a lower APR

If you can’t transfer the entire balance on an existing card to the new balance transfer card, you can contact your current card issuer and ask for a lower interest rate on the remaining balance. Card issuers are often willing to work with existing cardholders in order to keep their business.  Tell your issuer you want to remain their customer but your main priority is to obtain the best interest rate possible in order to you can pay off your debt faster. 

Obtain a personal loan

If you have a lot of credit card debt, you might want to take out a loan to pay off your credit card debt. A loan has fixed payments so you can plan the payment schedule to your needs. The most important thing with a personal loan is to find one with a significantly lower interest than what you are paying on your existing card. You have two options:

  • Take out a loan to cover the entire debt amount. This enables you to make one payment to cover your debt.
  • Transfer the approved amount to the balance transfer credit card and obtain a loan to cover the remaining balance. You will pay no interest on the transferred amount and you will pay less interest on the loan because balance is smaller. 

Apply for another balance transfer credit card

While this isn’t the most ideal option, you can apply for another balance transfer card with a 0% APR and split your debt between the two cards. Because having multiple hard inquiries can damage your credit score, you should wait several months before applying for a new card.

Make sure you continue paying balances on both cards during this time. Applying for a new card will lower your overall credit utilization since your credit limit will be higher.

What Should I Do Going Forward?
Regardless of the option you choose, remember your goal is to eliminate your credit card debt. Make sure you pay off your debt on the balance transfer card before the 0% APR period ends. Also, try to improve your credit by making your payments on time and reducing your spending until debt is eliminated

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