Passengers traveling on transit networks involve two kinds of decision-making strategies: deciding which lines are attractive at an origin or transfer node (denoted line strategy, LS), or deciding which node to transfer at when riding a line (denoted node strategy, NS). Combining these two strategies, this paper proposes a novel variational inequality formulation for the user equilibrium passenger assignment problem. The inclusion of the NS eliminates the need for passenger assignment on a large augmented graph, reducing the modeling complexity and making it easier to track all passengers’ travel routes. Moreover, constraints on the maximal number of transfers—which are crucial in practical decision-making on transit networks—are explicitly included, further drastically reducing the set of passengers’ feasible strategies. Furthermore, some extant strategy-based transit assignment models are shown to be a special case of the proposed model when the transfer constraint is removed. Finally, the properties of the proposed model are illustrated on a small network, and the model and algorithm exhibit huge advantages on the chosen transit subnetwork of Beijing.