System controller and method for protecting a power converter. The system controller includes a first controller terminal configured to output a drive signal to a switch to affect a first current flowing through a primary winding of a power converter. The power converter further includes a secondary winding coupled to the primary winding, and the drive signal is associated with one or more switching periods. Additionally, the system controller includes a second controller terminal configured to receive a sensing voltage from a sensing resistor. The sensing voltage represents a magnitude of the first current flowing through the primary winding of the power converter. The system controller is configured to process information associated with the sensing voltage and a reference voltage, and determine whether an average output current of the power converter is larger than a current threshold.