A guide to credit limit transfers
Quick insights
- A credit limit transfer involves moving credit from one credit card to another, provided both cards are from the same issuer.
- There are some reasons why you might want to initiate a credit transfer, such as to help optimize your rewards or improve your credit utilization ratio.
- Credit limit transfers are not the same as a credit line increase, which changes the total amount of credit available to you.
A credit limit is the maximum amount that a person can spend on their card, set by the credit card issuer. Credit limit transfers involve reallocating available credit from one credit card to another within the same issuer or lender. By transferring credit from one card to another, cardmembers may be able to manage their credit more effectively according to their financial needs.
Note: a credit limit transfer is different from a credit line increase. You are not changing the total amount of credit available from an issuer, but rather the amount of credit each card has. Additionally, credit limit transfers are not balance transfers, which typically involves moving credit card debt from one card to another with a lower interest rate.
Let’s go into more detail about credit limit transfers below.
Can you transfer credit from one card to another?
You may be able to transfer credit from one card to another depending on your issuer’s terms and conditions. Typically, you can only transfer credit from one card to another within the same bank.
Ways to transfer a credit limit between cards
To initiate a credit limit transfer, you usually need to contact your credit card issuer and request the reallocation. The issuer will assess the request and may consider factors like creditworthiness and account standing before approving the transfer. Note that the timeline for approval and reallocation depends on your issuer and that the terms and conditions should include any fees associated with a credit limit transfer.
Why you may want to transfer credit limits
There are a few possible reasons why you might want to transfer credit limits from one card to another. These include:
- You use one card more often than the other and want to make more room for purchases on it.
- You want to transfer the credit on a card you’re about to close to an existing card to maintain your current credit limit.
- You want to improve your credit utilization ratio on a card you use more often by increasing the credit limit. Improving your credit utilization ratio is one of several factors that may influence your credit score.
- You want to increase spending power on a card you use more often to earn more rewards on purchases.
Conclusion
Whether you’re looking to optimize rewards earning on a credit card or hoping to maintain an existing credit limit after closing a card, a credit limit transfer may be a helpful strategy when managing your credit. Terms and conditions for your cards may affect a transfer, so reviewing them may provide helpful information.
