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Can my balance transfer be higher than my credit limit?

Your balance transfer cannot be higher than your approved credit limit. So here’s what to do if you can’t move all your debt onto a new credit card.

When you apply for a balance transfer credit card, both the credit limit and the amount of debt you want to move are subject to approval. In some cases, you could be approved for a balance transfer credit card with a credit limit that is less than the debt you wanted to transfer onto it. While you could still get a balance transfer onto the new card, you’d also have a balance on your old card.

So before you apply for a balance transfer credit card, it’s a good idea to think about what factors could lead to only part of your balance transfer being approved – as well as what to do if that happens.

Why would only part of my balance transfer be approved?

Here are some of the major elements that could influence your balance transfer outcome.

Credit history

Your credit history and credit score are assessed for both the credit card and the balance transfer. In some cases, your credit history could be acceptable for the card but not for a credit limit that would be high enough to support your balance transfer debt – particularly if you have a poor or bad credit score.

In Australia, a bad credit score is any number between 0 and 509. This score would usually indicate recent issues with managing debt. For example, you may have applied for a lot of credit in a short period of time, defaulted on an account or filed for bankruptcy.

As a general guide, you’re more likely to have success with credit applications if your credit score is within the Good, Very Good or Excellent brackets, which range from 622 to 1,200. These scores indicate you’re able to manage credit responsibly by making payments on time and avoiding issues such as default accounts or frequent applications.

Get your free credit score now

Income and employment

Credit card providers use details of your income and employment to help determine your credit and balance transfer limit. Having a low income, only working casually or part-time and even changing jobs could all have a negative impact on your balance transfer credit card application.

However, it is less about the actual numbers and more about how your income compares to your expenses. When you apply for a credit card, you will have to provide details of all of your sources of income as well as your expenses (rent or mortgage payments, childcare, groceries, etc). If you’re spending the majority of what you earn (or more), it will be looked upon less favourably than if you were saving every month.

Existing debt

As well as your income, the amount of debt you already have can affect the credit limit you get on a new credit card. So even if you apply for a balance transfer because you want to pay down your debt, it could be hard to get approved for the whole amount if what you owe is high in relation to your income.

But there is a silver lining: if you have existing debt, your creditworthiness can improve when you are making payments towards it. This is because your repayment habits indicate that you will repay what you owe.

How can I find out why my credit limit is lower than my balance transfer amount?

If you have been approved for a balance transfer credit card with a limit that’s lower than the debt you want to transfer, you can call the bank or credit card company and ask them for more information about this decision. While they may not be able to give you the full details, it could help you decide what to do next.

What can I do if my balance transfer is over the credit limit?

credit-card-cancellation-via-phone

Here are some of the options you can consider when your debt is worth more than the balance transfer limit you’re approved for:

  • Cancel the application. If you haven’t received or activated the card, you can call the issuer and ask them to cancel the application. There should not be any charge for this.
  • Cancel the card. You can cancel your new card at any time after it’s been activated. But make sure you do this before the balance transfer has been processed. Also note that if the card has an annual fee, you may need to pay it before the account can be closed.
  • Go ahead with the transfer. If you’ve got a balance transfer credit card with a competitive introductory 0% interest offer, then you may still want to use it to pay down whatever debt can be moved to the card. Just remember to budget for repayments on your existing card and, if possible, aim to pay off the debt that’s still being charged interest first to help keep your costs down.

Example: Is getting a partial balance transfer worth it?

Let’s say you owe $5,000 on a credit card with an interest rate of 19.99% p.a. and can afford to pay $400 off it per month. If you stuck with this card as it is, it would take 15 months to pay off the debt and cost you $653.35 in interest.

Now, say you’re approved for a balance transfer credit card offering 0% p.a. for 18 months but can only transfer $3,000. If you went ahead with the transfer, you could split up your $400 payment between the cards to help save on interest.

For instance, if you paid $300 per month off the card with the $2,000 debt and interest rate of 19.99% p.a., it would take around 8 months to clear the debt and cost you $137.91 in interest. During this time, you’d also be paying $100 per month off your new balance transfer card’s debt. So after 8 months, the balance on that card would be $2,200 and you’d still have 10 months of the 0% interest rate.

If you then continued to pay $400 per month on the debt, it would take you 6 more monthly repayments to clear the debt. So in this scenario, you’d enjoy a 0% p.a. interest rate on your $3,000 balance transfer for the whole time before you paid it off.

Even if you aren’t approved for the full $5,000 balance transfer, transferring the $3,000 you’re eligible to transfer to a new 0% p.a. card saves you $515.44 in interest and you’d be out of debt one month sooner.

What else do I need to know about balance transfers and credit limits?

Keep these factors in mind when you’re comparing credit cards or applying for a balance transfer, so you can find an option that suits your needs.

  • Applying for another card. If your balance transfer card is approved with a credit limit that’s lower than the debt you want to transfer, you could consider cancelling that card and applying for a different one. But keep in mind that applying for several cards in a short span of time can negatively impact your credit history and, in turn, may make it harder to get a balance transfer approved.
  • Maximum balance transfer amounts. Depending on the credit card, you could be able to transfer a maximum of 70-100% of your approved credit limit. So in some cases, you may not be able to transfer all of your debt even if it’s equal to, or more than, your approved credit limit.
  • Credit cards with high credit limits. There is a range of credit cards that offer high minimum credit limits of say $6,000 or $15,000 (subject to approval). If you have a lot of debt, you could look for balance transfer offers on one of these cards. Just make sure you meet the application requirements before you apply because these cards also typically require high minimum incomes.

While it’s ideal to get approved for your entire balance transfer, there are times when the debt you have could be higher than your card’s approved credit limit. So if that happens, make sure you weigh up your options to decide if the balance transfer will still suit your goals.

Westpac Credit Card Online Offer

Westpac Low Rate - Online Offer

0% p.a. for 30 months on balance transfers
with a one-time 2% balance transfer fee

Offer ends 28 February 2018

Eligibility criteria, terms and conditions, fees and charges apply

Westpac Credit Card Online Offer

The Westpac Low Rate credit card features a long-term balance transfer offer, a first year annual fee waiver and a low variable interest rate on purchases.

  • $0 p.a. annual fee for the first year ($59 p.a. thereafter).
  • 13.49% p.a. on purchases
  • 0.00% p.a. for 30 months with 2% BT fee on balance transfers
  • Cash advance rate of 21.49% p.a.
  • Up to 55 days interest free
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Compare balance transfer credit cards

Rates last updated February 21st, 2018
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Name Product Balance transfer rate (p.a.) Purchase rate (p.a.) Annual fee Amount Saved Product Description
Westpac Low Rate - Online Offer
0% p.a. for 30 months with 2% balance transfer fee
13.49% p.a.
$0 p.a. annual fee for the first year ($59 p.a. thereafter)
Take advantage of 0% p.a. for 30 months on balance transfers with a 2% balance transfer fee when you apply online by 28 February 2018.
NAB Premium Card - Exclusive Offer
0% p.a. for 25 months
19.74% p.a.
$90 p.a.
Exclusive to finder.com.au, enjoy a no BT fee, 0% balance transfer offer for 25 months and seven complimentary insurance covers.
St.George Vertigo Platinum - Online Offer
0% p.a. for 24 months
12.74% p.a.
$99 p.a.
Platinum card benefits including complimentary insurance, plus 0% p.a. for 24 months on balance transfers (with no BT fee). Ends 28 February 2018.
Bankwest Breeze Classic Mastercard
0% p.a. for 24 months with 2% balance transfer fee
12.99% p.a.
$79 p.a.
Receive a long-term balance transfer offer of 0% p.a. for 24 months, a low ongoing purchase rate and up to 55 interest-free days on purchases.
Woolworths Everyday Platinum Credit Card
0% p.a. for 14 months
19.99% p.a.
$0 p.a. annual fee for the first year ($49 p.a. thereafter)
Receive a $50 eGift Card when you meet the offer criteria, a 0% p.a. for 14 month balance transfer offer and a $0 first year annual fee.
HSBC Platinum Credit Card
0% p.a. for 22 months with 2% balance transfer fee
19.99% p.a.
$129 p.a.
Offers a 0% p.a. for 22 months balance transfer and an annual fee refund each year when you spend $6,000. Plus, complimentary travel insurance.
St.George Vertigo Visa
0% p.a. for 18 months with 1% balance transfer fee
13.24% p.a.
$0 p.a. annual fee for the first year ($55 p.a. thereafter)
Save with a $0 first year annual fee and a 0% p.a. for 18 months balance transfer offer. Plus, up to 55 days interest-free on purchases.
Citi Rewards Platinum Credit Card
0% p.a. for 26 months with 2.5% balance transfer fee
20.99% p.a.
$49 p.a. annual fee for the first year ($149 p.a. thereafter)
Earn reward Points per $1 spent, take advantage of a 0% p.a. for 26 month balance transfer offer, plus complimentary international travel insurance.
Bank of Melbourne Vertigo Platinum
0% p.a. for 24 months with 1% balance transfer fee
12.74% p.a.
$99 p.a.
Offers a long-term balance transfer, low ongoing purchase rate, complimentary travel insurance and access to a 24/7 personal concierge service.
HSBC Low Rate Credit Card
0% p.a. for 20 months with 2% balance transfer fee
13.25% p.a.
$79 p.a.
Receive up to 20 months interest-free on balance transfers with a 2% BT fee. Also enjoy exclusive offers with the home&Away Privilege Program.
Bankwest Breeze Platinum Mastercard
0% p.a. for 24 months with 2% balance transfer fee
12.99% p.a.
$99 p.a.
Receive a 0% p.a. interest rate on balance transfers for 24 months, complimentary travel insurance and 0% foreign transaction fees.
Citi Platinum Credit Card - 100k Bonus Points
0% p.a. for 15 months with 1% balance transfer fee
20.99% p.a.
$49 p.a. annual fee for the first year ($149 p.a. thereafter)
Earn 100,000 reward Points, enjoy a long-term balance transfer offer, a discounted first year annual fee and complimentary travel insurance.
Qantas American Express Ultimate Card
0% p.a. for 12 months with 1% balance transfer fee
20.74% p.a.
$450 p.a.
Take advantage of 100,000 bonus Qantas Points, a $450 Qantas Travel Credit each year and 2 yearly complimentary Qantas Club lounge invitations.
Virgin Money Low Rate Credit Card
0% p.a. for 14 months
11.99% p.a.
$49 p.a.
Receive a discounted annual fee, $100 cashback when you meet the spend requirement and up to 14 months interest-free on balance transfers.
Citi Simplicity Card
0% p.a. for 15 months with 1.5% balance transfer fee
19.99% p.a.
$0 p.a.
Earn 5% cashback on eligible purchases (capped at $50 per month) for the first 90 days from card approval. Plus, a 15 month balance transfer offer.
Virgin Australia Velocity Flyer Card - Bonus Points Offer
0% p.a. for 18 months
20.74% p.a.
$64 p.a. annual fee for the first year ($129 p.a. thereafter)
Earn up to 60,000 bonus Velocity Points in the first 3 months and enjoy a discounted annual fee of $64 for the first year. Ends 28 February 2018.
BankSA Vertigo Visa
0% p.a. for 18 months with 1% balance transfer fee
13.24% p.a.
$0 p.a. annual fee for the first year ($55 p.a. thereafter)
Save with a $0 first year annual fee and a 0% p.a. for 18 months balance transfer offer. Plus, up to 55 days interest-free on purchases.
Virgin Australia Velocity Flyer Card - Balance Transfer Offer
0% p.a. for 18 months
20.74% p.a.
$64 p.a. annual fee for the first year ($129 p.a. thereafter)
Save with 0% p.a. for 18 months on balance transfers and earn 3 bonus Velocity Points per $1 for the first 3 months. Offer ends on 28 February 2018.
American Express Platinum Edge Credit Card
0% p.a. for 12 months with 1% balance transfer fee
20.74% p.a.
$195 p.a.
Receive a bonus 50,000 Membership Rewards points, a yearly $200 Travel Credit and complimentary domestic and international travel insurance.
St.George Rainbow Vertigo Visa
0% p.a. for 18 months with 1% balance transfer fee
13.24% p.a.
$0 p.a. annual fee for the first year ($55 p.a. thereafter)
Enjoy $0 first year annual fee and a 0% p.a. for 18 months on balance transfers. Plus, receive up to 55 days interest-free on purchases.

Compare up to 4 providers

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Amy Bradney-George

Amy is a Senior Writer at finder.com.au with more than 10 years experience covering credit cards, personal finance and various lifestyle topics. When she’s not sharing her knowledge on money matters, Amy spends her time as an actress.

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Credit Card Offers

Important Information*
American Express Velocity Escape Card
American Express Velocity Escape Card

Interest rate

20.74

Annual fee

0
NAB Premium Card - Exclusive Offer
NAB Premium Card - Exclusive Offer

Interest rate

19.74

Annual fee

90
St.George Vertigo Platinum - Online Offer
St.George Vertigo Platinum - Online Offer

Interest rate

12.74

Annual fee

99
Westpac Low Rate - Online Offer
Westpac Low Rate - Online Offer

Interest rate

13.49

Annual fee

59

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