If you’re struggling to pay down a credit card balance due to high interest rates, you’ve probably considered switching to a balance transfer credit card like the NAB Gold card. But did you know that you might not be able to transfer your full existing balance to the new credit card? While balance transfers might be a good option for you, you should understand the potential limitations before jumping on the idea.

Let’s take a look at transferring credit card balances, a common balance transfer limit, and what that might mean in your situation.

Balance Transfer Limits Are Card-Specific

If you have a high outstanding balance on your current credit card, it’s very possible that you will not be able to transfer all of it to a single new card — especially if you’re close to your credit limit. That’s for two reasons:

1. There is no guarantee that the new credit card will offer the same (or higher) credit limit. If you have a lower credit limit on the balance transfer credit card than what you owe, you clearly cannot transfer everything there.
2. Even if you do find a balance transfer credit card with a comparable credit limit, credit card companies generally place limits on how much you can transfer. For example, it’s common for them to only authorise balance transfers of up to 95% of your new credit limit. This leaves some wiggle room for interest and fees, so they don’t immediately push you over that limit.

That said, maximum balance transfer amounts can vary depending on the card issuer. So always review the terms and conditions or call the credit card company for more information before applying for a balance transfer credit card rather than assume you can transfer your entire existing balance.

Examples of Balance Transfer Limits vs. Existing Balances

Let’s look at that 95% limit in some examples.

1. If you currently owe $7500 and you are only approved for a $7000 balance transfer card credit limit, you would only be able to transfer $6650 to the new credit card (based on the 95% maximum). That leaves a balance of $850 on your first credit card.
2. If you currently owe just $6000 and are approved for that same $7000 credit limit for the new card, you can transfer your entire balance as it’s less than 95% of your new credit limit.

There are other things to keep in mind. For example, there is no guarantee the bank will approve your balance transfer request for the full amount. You might want to ask them about their approval process or requirements before applying. And what can you do if you aren’t able to transfer the full balance?

You could either look for a credit card offering a higher credit limit (assuming you meet the eligibility standards), or you could split your existing balance between multiple balance transfer credit cards. A third option always available is to transfer as much as you can and then pay off the remaining high interest balance as soon as possible. Balance transfers might not be the simple solution you’re hoping for, but go in educated about the process and you can make it work well for you.