Balance transfer credit cards have restrictions around which institutions you can balance transfer your debt to enjoy a low or 0% interest rate for an introductory period. Typically, this is because the credit card companies involved in the transfer have financial ties to one another. For example, when one company is the fiscal issuer of credit cards for the other company. Also, you cannot conduct a balance transfer within the same company; for example, if you already have a Westpac card, you cannot balance transfer to another Westpac card offering an introductory interest rate. In these situations, the credit card provider generally declines your request for a balance transfer.
Changes between credit card brands and issuers
Some credit card brands may change card issuers from time to time, making it essential to check your current card issuer when you wish to request a balance transfer. In some cases, the previous issuer may still be affiliated with your account, which could affect your ability to balance transfer your debt to other associated credit card brands.
Why are balance transfers not allowed between cards by the same issuer?
The reasoning behind this comes down to the structure of a balance transfer. The process essentially allows you to shift debt from one creditor to another to refinance your loan at a lower interest rate.
The transfer occurs when your new credit card issuer transfers the amount of your debt from the previous issuer, usually charging a transfer fee in the process. Since balance transfer offers are typically promotions to attract new customers and gain new debt on their books, card issuers rarely permit existing customers the opportunity to refinance within their umbrella of issued cards.
What happens if I apply for a balance transfer with the same credit card issuer?
If you accidentally apply for a balance transfer with the same provider, the outcome depends on the companies involved and your financial circumstances. Some possible results could include:
- The provider declines your application. In most cases, the reason the provider refuses your request usually has more to do with other factors, including your credit score and credit history. Even if a balance transfer isn’t possible, you may still receive approval for the card.
- You could receive a black mark on your credit history. If the provider denies your application, the credit inquiry potentially leaves a black mark on your credit report. However, it’s not disastrous unless you repeatedly apply for credit and keep being rejected. Learn more about good and bad credit ratings.
- You could receive an offer for the new card without the balance transfer. For example, if your credit report is in good order, the provider may grant you a card with a side note stating the provider cannot process your balance transfer request.
Most of the time, you can balance transfer between non-affiliated lending institutions, but it’s safer to check before applying to make sure. Call your prospective card company, provide details of your current issuer and ask them if you can transfer your existing balance to them.