How Do Balance Transfer Credit Cards Determine Your Initial Credit
Your credit limit on the balance transfer card is determined by your financial circumstances. The credit card company will look at your credit report and check other information such as monthly income when deciding the credit limit of the card. You will find that the credit limit you are assigned is different depending on which credit card company you sign up. You can expect a $5,000 credit limit if you have an average credit score. If your credit score is excellent, there should not be a problem in obtaining a balance transfer card with a credit limit of up to $10,000. If your credit score is low, the card will probably only have a $500 credit limit.
Most balance transfer cards do not allow you to transfer to the full limit and you usually can only transfer up to 95% of the credit limit. The remaining credit limit is reserved for other fees such as balance transfer fees and APR interest fees. There may also be a maximum transfer limit that limit the amount that you can transfer into your card at one time. You can only move the balance of credit cards that are issued by other banks.
Balances from credit cards issued by the same bank can’t be transferred. Therefore, to find out how much you are allowed to transfer, you must first find out the credit limit rule from the credit card company. You must confirm whether there is a maximum transfer limit. Finally, you have to check whether the cards that you want to transfer the balance from are compatible with the balance transfer card that you want to apply.
If the balance transfer card does not have enough credit limit, you can ask the credit card company to increase the limit. The best time to ask the credit card company to increase the credit limit is when you have promptly repay the balance for several months. This allows the credit card company to have trust in you when reviewing the history of your account. You can always look for another 0% balance transfer card with a longer introductory period if the current balance transfer card that you have been approved does not have enough credit limit. The downside is that it can ding your credit scores especially when you are making a number of credit card applications in a short period.
You can always move part of your credit card debt to the balance transfer card and repay that part of debt first. You can then think of other ways to settle the remaining credit card debts that you are unable to transfer. You will find yourself still saving a huge amount of money in interests even if you just move part of the credit card debt into the balance transfer card.