Whether you're juggling balances on multiple credit cards that are all earning high interest or you're carrying a balance on one high-interest credit card, a balance transfer is likely the perfect tool for you.
Completing a balance transfer is a lot easier than you think, as you can usually submit the request via your credit card application, but things may not always go as planned. That's because you aren't guaranteed to be approved for any amount, and you won't know that amount until you actually apply and get approved.
So what happens if you're approved for the card, but your transfer amount isn't as high as you expected? Here's what you need to know.
Why were you approved for a lower amount than you expected?
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. Even if you apply for a credit card that matches your credit score, there's no guarantee you'll be approved for the balance transfer limit you need.
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What should you do when your transfer credit card limit is too low?
You can do a handful of things if you find yourself in this situation. Here are your best options:
Call your provider and request a higher limit
Although it might seem like something that will get you nowhere, if you explain to your provider that you want to transfer your entire balance from one or more cards to your new card, chances are they might be willing to help you out and increase your credit limit. Remember that there's no harm in asking since the worst they can tell you is no. After all, your issuer may be willing to increase your limit because having your entire balance on a single card with one issuer means you'll be loyal to them.
Keep in mind if you already transferred part of your balance to the new card, you will likely have to make a second balance transfer, which means you'll incur a second balance transfer fee of 3% to 5% of the total amount transferred.
Work on paying down your balance on both cards
If you've managed to transfer some of your outstanding balance to a credit card with a 0% intro APR on balance transfers, then you've already saved yourself quite a lot in interest. Even if you're still paying off some of your remaining balance on a card that is accruing interest, you can take advantage of the fact that you aren't paying interest on your new card and focus on paying both of them down.
If you can get the balance on your new card taken care of, you might even be able to transfer what's left on the old credit card -- although you'll want to watch out for time limits such as 45 or 90 days for qualifying balance transfers to get the 0% intro APR or a lower balance transfer fee.
Consider an alternative option
If you're struggling with a lot of credit card debt, it might be in your best interest to look into an alternative to get it all paid off, such as a personal loan. Taking out a loan will enable you to pay off all of your credit card balances in one fell swoop, consolidating your debt into one single monthly payment. Since most personal loan services offer fixed payments, you'll be able to plan for a payment schedule that fits your current budget and needs.
It should be noted that a personal loan is only a good solution if the interest you're paying on the loan is less than the interest your credit card is charging. If the loan's interest is higher than your credit card's, it's not worth consolidating your debt with a personal loan because you'll be paying more interest in the long run.
Something else to keep in mind is since you were already approved for a balance transfer credit card, you may want to consider transferring the approved limit to that card then use a personal loan to pay off the remaining balance. That way, you'll pay no interest on the transferred amount and less in interest on the loan because the balance will be smaller.
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Apply for another balance transfer card
Although it's not an ideal solution, considering another balance transfer credit card is definitely an option for you. While you may be tempted to apply for another card right away, it's unwise to apply for more than one credit card in such a short time frame, as multiple hard inquiries appearing on your credit reports at once can hurt your credit. As such, it's a smart move to wait a couple of months or more before you try applying for another credit card.
During this time, make sure to not only continue to pay your high-interest and balance transfer credit cards on time but also track your credit reports and scores so you can keep an eye on where your credit sits and whether the new inquiries have caused any damage. Once you feel like it's the right time to apply, be sure to pick the right balance transfer credit card for your needs.
[This article was first published on The Simple Dollar in 2020. It was updated in February 2022.]