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Can You Pay a Credit Card With a Credit Card?

Dahna Chandler • November 21, 2023

When your credit card bills are due each month, you may wonder if you can pay a credit card with another credit card. While you can’t do it directly, using one credit card to pay off another through balance transfers or cash advances is possible. However, there are some considerations to understand about each strategy.

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Reasons why you cannot pay a credit card debt with another card

Credit card issuers don’t allow you to pay a credit card with a credit card from a different financial institution for a couple of reasons.

First, this guideline prevents you from moving your debt across credit cards. If you use one credit card to pay off another, you can get trapped in a debt cycle without reducing your debt. Paying your credit debt this way can lead to additional fees or higher interest rates, ultimately worsening your financial health.

Credit card companies want to encourage responsible use of credit. They often offer structured alternatives like balance transfers and cash advances for using a credit card to pay off debt.

When used wisely, balance transfer cards, which allow you to transfer existing credit card balances from current cards to a single new card, can help you consolidate debt and reduce interest payments.

Cash advances, which are short-term loans from your credit card issuer, provide funds that you can use to make credit card payments.

But before using these alternatives to pay off your credit card debt with another credit card, understand the terms and conditions set by credit card issuers.

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Understanding balance transfer credit cards

Balance transfer credit cards are a way to move higher-interest credit card debt to a credit card with a 0% or low-interest introductory APR. Credit card companies offer this to allow consumers to consolidate their credit card debt onto a single card. This can mean you save money on interest charges from the lower interest rates, enabling you to reduce the principal balance more easily.

Pros and cons of balance transfer credit cards

Weighing the benefits against the drawbacks of balance transfer credit cards can help you make an informed decision. These cards can be a strategic tool in your financial arsenal if used wisely, but they require a clear understanding of their terms to maximize the benefits.

Pros

  • Reward programs: Some credit cards have programs that provide points or cash back on purchases, giving you extra value for every dollar you spend.
  • Interest-free introduction period: This gives you the opportunity to pay down your credit card debt while not accruing interest.
  • Help you save money: By consolidating multiple debts into one balance transfer card, you simplify your finances with a single payment. This can reduce the possibility of multiple late fees and help you keep track of your finances.
  • Credit score improvement: Used wisely, balance transfer cards can help lower your credit utilization rate, which may positively impact your credit score over time.

Cons

  • Possibility of being declined: Even with a strong financial background, approval isn’t guaranteed since credit card issuers have strict requirements for debt transfer cards.
  • Fees: The fees can range from 3% to 5% of the transferred amount, adding to the cost of the credit card.1
  • Higher interest rates post-introductory period: The standard annual percentage rate (APR) can increase significantly after the low or zero interest introductory period ends. That can cancel out the benefits of the transfer if you don’t pay the balance off on time.
  • Transfer limits: There may be a cap on how much debt you can transfer, which could be lower than your total debt, leaving you with multiple accounts to manage.

What to consider before transferring your credit card balance

A balance transfer can be a savvy financial move if you consider all the aspects to make sure it aligns with your financial goals.

Balance transfer fees

These fees, which can be 3% to 5% of the transfer amount, may reduce your savings from the lower interest rate.1 So, do the math: calculate how much you’ll save in interest versus how much you’ll pay in transfer fees.

Credit limits

The credit limit on the balance transfer card dictates how much debt you can transfer. A limit that won’t allow you to move your existing balances over will lower the effectiveness of consolidating multiple balances.

APR offers

Post-introductory period APRs can vary widely. Be aware of how the long-term interest rate will affect your repayment costs if you don’t pay before that period ends.

Impact on credit score

Short term, a balance transfer can lower your credit score because of hard inquiries on your credit to get the cards. However, it may improve over time with responsible management of the new debt.

Understanding cash advances

cash advance allows you to withdraw a portion of your credit limit in cash. This feature is intended for urgent cash needs and comes with terms that differ from regular credit card purchases.

When considering a cash advance, be mindful of the following points.

Pros and cons of cash advances

While cash advances offer quick funds, they come with considerable costs. Understand both the immediate benefits and the long-term implications.

Pros

  • It’s a quick option: In urgent situations, a cash advance can provide immediate access to money, which can be crucial for unexpected expenses.
  • No collateral required: Unlike other types of loans, cash advances don’t require collateral, making them less risky personal assets.
  • No need for a credit check: Cash advances typically don’t require a credit check, so you can access funds without impacting your credit score.

Cons

  • Additional fees: Cash advance fees, often a percentage of the advance plus ATM fees, can make this an expensive way to access cash.
  • It may be worse in the long run: The convenience of quick cash can lead to a cycle of advances that may worsen debt issues if not carefully managed.
  • It’s expensive: With typically higher APRs than regular purchases and no grace period, the cost of borrowing through cash advances adds up quickly.

While cash advances are a quick way to make credit card payments, it’s one of the most expensive loans you can take. Don’t turn to these unless you have few options.

7 tips to keep your card debt under control

Effective debt management is the key to financial freedom. Here’s how to maintain control over your credit card debt for a healthy financial future.

  1. Know what you owe: The first step in crafting a plan to repay your debts is to total your debts accurately.
  2. Work on a plan: Having a tactical approach, like focusing on paying off high-interest debt first, can save you money in the long run.
  3. Create a schedule. Consistent payments scheduled around your cash flow can help reduce your debt steadily.
  4. Put payment dates on your calendar. Missing payments can lead to fees and dings on your credit report, so get calendar reminders of when they’re due.
  5. Monitor and track your information. Keeping a close eye on your financial transactions and credit report can help you spot issues early and adjust your plan as needed.
  6. Stay open-minded. Flexibility in your financial planning allows you to adapt to changes in your income or expenses, keeping you on track toward your goals.
  7. Use balance transfers and cash advances wisely. Don’t make these your go-to methods of managing debt.

Applying these tips can help you improve your credit and lay a strong foundation for financial stability.

Can credit pay for credit?

While it’s not feasible to pay off one credit card directly with another, there are structured methods like balance transfers and cash advances you can use.

Understand the details of each option, considering fees, credit limits, APRs, and the impact on your credit score. Use informed decision-making and intelligent financial planning.

Looking for other tips to manage your debt? Learn more about paying off credit card debt.

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1 Information from Forbes Advisors' "What Is A Balance Transfer Fee?," as of November 16, 2023; https://www.forbes.com/advisor/credit-cards/balance-transfer-fee/

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