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If you have multiple credit cards with the same bank or card issuer, you can typically transfer the available credit you have between them. Moving your credit limit from one card to another can have several benefits, but it's important to consider your reasons before you call customer service.
What Does It Mean to Transfer Credit Limits?
Transferring or shifting credit limits means that you're moving a portion of your available credit from one card to another with the same financial institution. This is possible because card issuers allocate a certain amount of borrowing power to cardholders, which may or may not be split among several cards. Moving around your credit limits doesn't increase or decrease your overall available credit.
However, that also means you can't transfer a credit limit from a card with one credit card company to a card with another.
Transferring credit limits is different from requesting a credit limit increase or decrease on a card because you're not gaining or losing any available credit. While your limit will go down on the card from which you're transferring available credit, the limit on the other card will increase in equal measure.
As a result, you'll maintain the same total amount of credit with the same bank.
How to Transfer Credit Limits Between Credit Cards
Requesting to shift your available credit from one card to another is a relatively simple process, but details can vary from bank to bank.
With many banks, for instance, you'll need to call the customer service team to request a transfer. With others, you may be able to send a secure message through your online account.
Notably, American Express may allow you to file your request through your online account without needing to contact customer service directly.
It's important to keep in mind, though, that there may be limitations with certain banks. For example, you may be required to have both accounts open for a set period or request a credit line increase on one card before you can transfer available credit to the other. Some banks don't even allow you to reallocate available credit to another card.
If you have questions, don't hesitate to contact your credit card issuer to get the answers you need.
Why You May Want to Transfer Credit Limits
There are several reasons to consider moving some of your available credit from one card to another. Here are some situations where you may want to request a transfer.
You Use One Card More Often
There are a lot of factors that go into determining your credit limit. If you use one card more often than another but have a lower limit, moving available credit from the card you use less frequently can help in several ways:
- It gives you more spending power. You don't have to worry about constantly bumping up against your credit limit if your limit has increased significantly.
- It allows you to earn more rewards. If you're using one card more because you prefer its rewards program, having more spending power with the card gives you the opportunity to better maximize your rewards-earning potential.
- It can improve your credit utilization ratio. Your credit utilization ratio, or the percentage of your credit limit that you're using at a given time, is an important factor in determining your credit score. If you use one card more than the other, increasing its limit can help drive down your utilization rate and potentially increase your credit score.
You're Closing a Credit Card
One of the drawbacks of closing a credit card is that you lose the available credit on that card. Depending on the situation, losing that available credit could increase your utilization ratio to the point that it decreases your credit score.
To help alleviate this potential problem, you can move available credit from the card you're planning to close, so you can still enjoy the benefits that come with it.
You're Opening a New Credit Card
One of the factors that card issuers consider when you apply for a new credit card is how much available credit you already have with them. If you've reached your maximum, you'll have a hard time getting approved for the new card unless you can move some of your available credit from an existing account to the new one.
This isn't always an option, but it can be a good way to get the card you want without having to cancel another card with the bank.
Watch Your Credit for an Impact
Regardless of why you want to transfer available credit from one card to another, it's important to watch for any positive or negative effects on your credit score. With Experian's free credit monitoring service, you'll get free access to your Experian credit report, along with your FICO® Score☉ powered by Experian data.
You'll also get real-time alerts when changes are made to your credit report, such as when a new inquiry is added.
After you request the credit limit transfer, keep an eye on your credit score and report to find out if there's an impact. Then continue to monitor your credit regularly to continue to build or maintain a good credit history for when you need it.