Having credit card debt can become a vicious cycle. Having multiple cards makes it even more challenging. This leads many people to wonder whether you can pay off a credit card with a credit card.
You cannot usually make a payment to one credit card directly using another. However, you can do so indirectly with a cash advance or balance transfer. While these are options, they are not always good ideas.
Continue reading to learn how you can indirectly use one credit card to pay another. You will also learn when you should consider this and when it is a poor decision.
Can You Pay Off Your Credit Card With a Different Credit Card?
The answer to whether you can pay your credit card with a credit card depends on what you mean by "pay." If you want to directly pay your monthly bill with a card, you are probably out of luck. However, if you are willing to put in some extra steps, you can.
Can You Pay a Credit Card With a Credit Card?
If you have multiple credit cards with varying interest rates, it is common to wonder if you can just use one with a lower rate to pay the one with a higher rate.
If you want to make a direct monthly payment, the short answer is no.
After all, if this were possible, you could theoretically go back and forth between two cards and never pay off your debt. Credit card issuers know that if they let you pay your bill with another credit card, this is simply a way to default on your payments. Even if that is not your intention, it would be the intention of others. By not allowing payments from credit cards, card issuers reduce this risk.
Instead, expect to pay your credit card bill with a bank account. You may also be able to use a check or cash to pay in person, depending on the issuer. You may even have the option to pay at an ATM, by mail, or over the phone. But a credit card will not be a payment option.
Can You Use One Credit Card to Pay Off Another Credit Card?
So, you can't directly use one credit card to pay another, but what about indirectly? This you can do, either with a balance transfer or a cash advance. One of these is a reasonable option, while the other is typically a poor financial decision.
Paying a Credit Card With a Balance Transfer From Another
As mentioned, a balance transfer is one method of using one card to pay another, but it doesn't involve your monthly bill.
With a balance transfer, you essentially move your debt from one card to another. For example, you would likely move the balance from a card with a high-interest rate to one with a lower rate.
Some credit card issuers will also offer low-interest promotions or other incentives for balance transfers.
There Will Be Fees
Before you do the balance transfer, be sure to check about any fees. Most credit cards will charge 3% to 5% of your total transferred amount. Depending on the difference in interest rates, this may not be worth the transfer.
They Take a Few Weeks
You also need to keep in mind that a balance transfer is not instant. It may take several weeks to complete.
Be Aware of Convenience Checks
Some balance transfers will use convenience checks, but not all credit cards will count this as a transfer. If the credit card issuer offers to use convenience checks, be sure to confirm that it will still be a balance transfer. You also need to confirm that using this method will not affect your interest rate.
Related post: Do Late Payments Affect Your Credit Score? For How Long?
Don't Expect to Accumulate Rewards
It is also very important to note that unless your credit card issuer explicitly says they offer rewards on balance transfers, they do not. This means you will not get cashback or accumulate miles for a balance transfer.
It is common for credit card issuers to offer short-term low rates for interest as a perk for transferring your balance.
How to Do a Balance Transfer
Many credit cards will offer an introductory interest rate that is incredibly low or even 0% just on balance transfers. If your current card does not have this offer, it may make sense to get a new card that does. Just remember to consider the pros and cons of opening another card before doing so, including its impact on your credit score and your ability to pay.
Once you have both credit cards, you can initiate the balance transfer online or over the phone. Contact the credit card you want to transfer the balance to do so. Have information on the name of the issuer, the balance, and the account information on hand.
The transfer frequently takes two weeks, but it can be even longer. Most of the time, your new credit card company will directly pay off your old account. Your new credit card statement will show the transferred balance and the fee.
Paying a Credit Card With a Cash Advance From Another Card
As mentioned, you can also pay a credit card using a cash advance that you get from another card. However, few financial advisors will suggest this.
That is for two main reasons:
- Cash advances usually have high fees
- Cash advances usually have high-interest rates (about 24% on average)
Simply put, getting a cash advance is an expensive method of getting cash. The fees and interest you pay on the advance will likely mean that you don't save much, if any, money by paying a high-interest credit card in this way. In some cases, you may even end up spending more overall.
On top of that, cash advances rarely qualify for credit card rewards. So, there is no built-in benefit of doing this.
Because of the high fees and interest rates, financial experts only suggest cash advances if you have no other choice.
When Should You Consider a Balance Transfer?
We've established that if you want to pay one credit card with another, your best option is to do a balance transfer. But how do you know whether this is a good idea?
When Balance Transfers Are Helpful
A balance transfer is especially useful if you have a balance on a high-interest credit card. If you transfer the balance to a low-interest card, you can easily save hundreds or thousands. You can save even more if you transfer the balance to a card with an introductory 0% APR.
Even if your credit card doesn't have a high-interest rate, it may make sense to do a balance transfer. For example, maybe you have a lot of open credit cards with balances. In this case, it can be challenging to stay on top of all of the payments. By transferring the balance of one (or more), you reduce the number of cards you have to remember to pay monthly. Even if your bills are on autopay, this reduces the transactions you have to track.
You can also use a balance transfer to move your balance to a specific card that you plan to focus on using. For example, maybe one of your cards has better rewards than the others. Even if you don't earn rewards on the balance transfer, it may be easier for you to have your full balance on that card. This way, when you use that card instead of others, your balance will all be on the same account.
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But Always Calculate Whether You Save
Remember that a balance transfer will not always make financial sense. Remember that there will be fees on your balance transfer. Those fees may be high enough to cancel out your savings. Or they may lead to minimal savings that make this option not worth the time.
Your Credit Score Will Play a Role
Unfortunately, a balance transfer may not even be an option for you. If, for example, you want to transfer the balance to a new card with a 0% introductory interest rate on balance transfers, you would first have to be approved for that card. If your credit score is low, this may not be possible.
Or maybe you will be approved, but not for a high enough limit to transfer the full balance.
And Consider Its Impact on Your Credit Score
You also need to consider the impact of opening a new card on your credit score. The hard pull can temporarily drop your credit score.
If you close the old card that previously had the balance, this can reduce your average account age. That would also reduce your score.
Other Options for Paying Off Credit Cards
If you decide that a balance transfer isn't right for you, there are still other options for paying off credit cards.
Of course, you can do your best and pay as much toward the principal as possible every month. You can also try one of the following.
Talk to the Card Issuer
The best option is to talk to the card issuer. If you are honest with them and haven't had many issues in the past, they may be willing to waive some late payments or interest fees.
You may even qualify for a program for credit card hardship. That could lead to temporary relief.
A Personal Loan
In some situations, it may make sense to take out a personal loan to pay for a credit card. This will depend largely on your interest rate, which depends on your credit score. Always calculate whether this would provide savings before taking the plunge.
You cannot use one credit card to directly pay the monthly statement of another. However, you can get a cash advance from the card or do a balance transfer. Cash advances are rarely recommended because of their high fees and interest rates. A balance transfer, on the other hand, may make sense for you.
Further Reading: Paying Off Collections To Improve Your Credit Score: Does It Work?
Shawn Manaher is a former financial advisor, has founded 5 online businesses, and is a coach, speaker, podcast host, and author. He's been featured on The Consults Corner on TAE Radio, The Writing Biz, What's Your Story, and more.