Assume you have high-interest balances on one or more credit cards and want to consolidate at a reduced APR. “Can you pay off a credit card with another credit card?” you may wonder. Definitely, yes, you can pay off a credit card using another credit card, and there are several ways to do so. However, each method has advantages and disadvantages.
In this article, I am going to show you how to pay off a credit card with another credit card, the easiest methods to do it and what to do if you are finding it hard to pay your credit card bills
How to pay a credit card bill with another credit card
Balance transfers and cash advances are the two most common ways to pay off a credit card using another credit card. Both can be considered shortly, but there are crucial differences that must be understood before moving further with either.
Although it’s possible to utilize a cash advance to pay off another credit card, it’s not a wise idea. The fee for a cash advance is frequently higher than the fee for a balance transfer for the same amount. Cash advances have usually levied a fee upfront.
You’ll never obtain a 0% APR on a cash advance, either. In addition, you’ll be charged interest right away, and that interest will typically be more than the card’s usual purchase and balance transfer APR.
In other words, if you use a cash advance, you may end up paying more than if you just used the original card’s amount.
How does a cash advance work?
In many cases, a cash advance is the most costly option. You can withdraw money from your credit card with a cash advance, just like you would at an ATM. To pay off your credit card, you must deposit the money into your bank account.
In many cases, cash advances come with significant fees and interest rates. It’s also vital to keep in mind that interest accrues the moment you take the money out of the account. Because it isn’t a conventional credit card purchase, it doesn’t begin to accrue until the conclusion of your monthly cycle. This means that a cash advance has no waiting period.
When a balance transfer occurs, a credit card from a different issuer is used to pay off an amount on an existing credit card, essentially transferring that balance to the new card. With a balance transfer, you’re merely transferring the balance of one card to another. The main reason for doing so is to consolidate debt from a higher-interest card to one with lower interest.
A balance transfer introductory annual percentage rate (APR) is normally 0%, but it can be lesser than the actual APR for a defined length of time, which can range from 6 to 20 months, depending on the card. It is possible that other cards will send balance transfer checks to current cardholders, so you do not have to apply for a new card to take advantage of this service.
With this option, it’s simple to pay off an amount and avoid interest charges at the same time. In most cases, the outstanding balance will continue to accrue interest at the usual APR until it is paid in full after the promotional period ends.
You can save money and get your debt paid off faster if you pay off your credit card amount before the promotional period ends if you have a card with a 0% APR balance transfer offer.
It’s important to remember that balance transfers normally charge between 3 percent and 5 percent of the transferred balance. In other words, if you transfer $5,000, you should expect to see between $150 and $250 added to your balance. However, if the interest savings outweigh the up-front price, it may be worthwhile to pay the fee.
How does a balance transfer work?
Many credit card issuers provide special balance transfer deals to entice new customers. To pay off your balance within the promotional timeframe, a balance transfer is a great option.
Balance transfer fees should be avoided where feasible. Check the interest rate after the promotional period ends and how a balance transfer may affect your credit score. Before transferring funds, read the cardmember agreement and contact your lender to confirm the details.
What are the pros of paying a credit card bill with another credit card
It’s possible to use a balance transfer to pay off your debt, but this option is not for everyone. Let’s consider the pros and cons briefly:
The Pros are:
- The 0% interest rate deal.
The major advantage of a transfer credit card with a 0% balance is the 0% introductory APR deal. During the promo time, all of the payments of your monthly bills will be applied to the principal amount.
- Consolidating your debts.
Using a single balance transfer credit card to combine your debt and eliminate the hassle of making different payments each month will save you time and money.
- Reduce the use of borrowed funds.
When you transfer a balance to a new card, the credit limit on your old card is reduced (lower credit utilization) by the amount of the new balance transfer credit. In the absence of any new debt, your utilization rate will continue to decrease as long as you keep up with your payments.
The drawbacks of using another credit card to pay a credit card debt
The idea of paying a credit card bill with another credit card may not appeal to everyone if any of the following apply:
- No Intention to stop using the first card.
In the event that you pay off an amount on another credit card, you should immediately stop using the card with the zero balance until you can pay off the larger one.
- Struggling to keep up with payments.
If you’re having trouble keeping up with your monthly credit card payments, it might not be a good idea to pay it off with another credit card. Even if you consolidate all of your debts, you won’t save money in the long run.
- Bad Spending habits.
Bad spending habits may worsen your debt if not checked. Ensure your curtail or reduce unnecessary expenses and make a budget that fits your income as soon as possible. This may include moving to cheaper apartments and stuff like that. The goal is to cut down on your expense which may be limiting your debt pay-off speed.
You Can’t Pay Off One Card Using Another Card From the Same Bank
Interest and other fees are a big moneymaker for banks, so they often won’t enable you to pay off one credit card with a credit card from the same bank.
To take advantage of a balance transfer offer, you should move your balance from one bank-issued credit card to another with a 0% APR offer. Use the balance transfer offer to deposit funds into your checking account, then pay off your credit card payment with those funds.
What to Do if You Can’t Pay Your Credit Card Bill
A balance transfer request is unlikely to help you if you’re having trouble making your minimum payments each month because you’ll have to pay the new card’s debt at some point.
However, there are alternative options to consider:
- Contact your bank or credit card company.
If you’re having trouble making your payments, you may be able to get help from your credit card company.
Discretion: a lower interest rate or a different payment schedule are all options for getting help. It’s important to bear in mind that this debt alleviation may only be for a short period, so it’s not a viable long-term option.
- Work with a Credit advisor.
A volunteer credit counseling agency may be able to help if you’ve already tried working with your credit card company and it hasn’t worked out. A credit advisor or counselor can assist you in assessing your current financial condition and formulating a plan of action.
A debt management plan may be necessary for some instances. It’s possible to negotiate with your creditors to lower your monthly payment or interest rate, and the agency can assist you to prevent defaulting on small amounts that may initially set in and another recurring cost.
- Offer to pay off your loan in full.
Offer to settle for less than you owe if your financial position is so bad that a debt management plan won’t help. This option should only be explored if you are already considerably behind on your payments, due to the significant damage it can cause to your credit score.
- Avoided Insolvency by filing for bankruptcy.
You may be forced to file for bankruptcy if you have exhausted all other options and still cannot find a solution. Nevertheless, bankruptcy should only be considered as a last choice because of the catastrophic impact it will have on your credit and money. This alternative may be beneficial to you if the appropriate situations arise.
- Make sure your credit is in order before you apply for a new credit card.
When considering a 0% APR balance transfer credit card, keep in mind that most lenders will only approve applicants with high or exceptional credit.
A credit score of 670 or above is normally required, according to FICO, the credit rating business. Before applying for a loan, check your credit score to see where you stand. If you need to strengthen your credit history, do so before applying.
Best Transfer Balance Cards to suit your needs
Here are some suggestions to help you get started:
U.S. Bank Visa® Platinum Card: It’s possible to get a 0% initial APR for the first 20 billing cycles on purchases and balance transfers with it, but after that, it has a variable APR of 14.49% – 24.49%.
Citi® Double Cash Card: carries a yearly fee of $0 and has a 0% intro APR on all balance transfers for 18 months. APRs will range from 13.99% to 23.99% after that, depending on a borrower’s creditworthiness. During the first four months after account opening, there is an initial balance transfer fee of either $5 or 3% of the amount of each transfer. After that, they will charge a minimum fee of 5% of each transfer. Thereafter, a fee of 5% of each transfer will be charged (with a minimum of $5).
Citi® Diamond Preferred® Card: 0% intro APR on eligible debt transfers for 21 months from the date of the initial transfer, and 0% intro APR for 12 months on expenditures, both from the date you activated the card. which charges no yearly fee.
Depending on your creditworthiness, the adjustable APR will be 13.74 percent – 23.74 percent. Within four months you opened the account, all balance transfers must be fulfilled. The greater of $5 or 5% of each transfer’s value is charged as a balance transfer fee.
The Bottom Line
The only way to consolidate your debt is to take full advantage of a balance transfer deal, which allows you to move money from one credit card to another. Ensure you consider the benefits and drawbacks before signing up for any new credit card that offers an introductory 0% APR.
A cash advance on your credit card should not be one of your options if you aren’t sure if a balance transfer is good for you. Explore both balance transfer cards and personal loans if you’re looking to consolidate your credit card debt. Calculate your savings on interest and the time it will take you to be debt-free, and then choose the option that best suits your circumstances.
Frequently Asked Questions
- When should I pay my credit card bill?
Prior to the due date each month, you should settle your credit card bill. Pay your credit card statement in full as quickly as practicable, even if you only pay a little portion of the outstanding sum. To improve your credit rating, it is beneficial to pay your payment in full or in part before a balance is reported.
2. Can I pay my credit card bill with a debit card?
Most credit card companies request a direct bank transfer to pay your bill online. A routing number and account number must be provided. It’s not possible to provide a debit card number here.
3. Could I pay a credit card bill with a cash advance?
You could legally pay your credit card bill with a cash advance from another card, but doing so would be costly and leave you more in debt. A money order would subsequently be used to settle your bill after you received an advance. It’s possible to pay your credit card bill in person at a local branch of the bank that issued it if it has one.