Can You Pay a Credit Card with Another Credit Card?
Learning how to pay credit card with another may be a topic of interest for people who are looking for alternative ways of debt management or consolidation.
While traditional payment options include bank transfers and credit card payments, it may be worthwhile to explore the option of using one credit card to pay off another, which can be flexible in some situations.
Stay with us as we guide you into the considerations, limitations, and potential benefits of this approach.
How to Pay Credit Card with Another
Credit card companies don’t allow the payment of your credit card bill using another credit card.
If you’re thinking about using one credit card to pay off another, you have two options: balance transfer or cash advance.
1. Cash Advance
When you draw a cash advance, you are simply borrowing the money from your credit card, just like when you withdraw money from an ATM.
It is the most expensive way to get money and often the last resort. Why? However, it is a costly process with high fees and interest rates.
The cash is then given to you, and you are the one who will have to deposit that money into your bank account to settle your debt.
However, that is exactly how the story goes; interest is right there, waiting to be added up.
As opposed to regular purchases with a certain grace period before interest begins, with a cash advance you will be charged interest from the first day.
2. Balance Transfer
When you do a balance transfer, you’re shifting your debt from one credit card to another. The concept is to move debt from high-interest cards to ones with lower interest rates.
The credit card companies, in particular, frequently offer special deals to convince individuals to open new cards with them.
These deals might give you 6 to 15 months with zero interest as an introductory offer. A balance transfer can be a smart move if you plan to pay off what you owe during this time.
But watch out for balance transfer fees, which can be as much as 5% of your transfer amount. Also, pay attention to the interest rate that kicks in after the promotional period ends.
And consider how a balance transfer might affect your credit score. Make sure to read the card agreement carefully and talk to your lender to understand all the details before you make the transfer.
How Long Does a Balance Transfer Take?
On average, you might be looking at around five to seven days for the process to complete. However, keep in mind that this timeframe isn’t set in stone.
The actual duration of the transfer depends on your specific credit card issuer.
Some issuers are speedy and can wrap things up in a matter of days, while others might take as long as three weeks or even more, stretching it out to around 21 days.
What to Consider Before Using a Balance Transfer
Before jumping into a credit card balance transfer, there are a few things to consider:
1. Introductory Rates
Some credit cards offer a good deal with low or even 0% interest rates for a limited time when you transfer your balance.
But remember, this honeymoon period won’t last forever. Be sure to know exactly when the regular rates kick in so you’re not caught off guard.
2. Transfer Fees
Although a 0% annual percentage rate (APR) might sound like a dream come true, there’s often a catch.
Many balance transfers come with fees, which could be a set amount or a percentage of the balance you’re moving.
Make sure you understand these fees upfront to avoid any surprises later.
3. Monthly Payments
Just because you’ve transferred your balance doesn’t mean you can skip out on payments.
You still need to keep up with at least the minimum monthly payments on your new card.
Also, if you haven’t moved over your entire balance, don’t forget to keep making payments on your old card too.
4. Late Payment Penalties
Missed payments can quickly turn your balance transfer dream into a nightmare.
If you’re late or miss a payment on your new card, you could lose that attractive introductory rate and even face penalty fees.
Stay on top of your payments to avoid any surprises.
5. Lender Rules
You can’t always shuffle your debt around however you please.
Most lenders won’t let you transfer balances between accounts with the same issuer.
So if you’re looking to move your debt, you’ll likely need to do it to a card from a different company.
Pros of Paying a Credit Card Bill with Another Credit Card
Here are the advantages:
1. Lower APR and Interest Savings: When you shift your balance from a high-interest card to one with a lower APR, you will be able to save some money on interest payments.
2. Managing a Single Balance: The ability to consolidate all credit card debts into one credit card makes it easier to keep track of and manage them. It is the simplest way of managing your finances by putting all balances into one.
Cons of Paying a Credit Card Bill with Another Credit Card
The disadvantages are captured below:
1. Continued Card Usage: If you do not transfer the balance to the new card and continue using the previous card, you may accumulate more debt and get yourself in an even worse financial situation.
2. Struggles with Payments: Individuals who are already in a precarious situation of making prompt payments will not find relief from the transferred balance. Debt consolidation doesn’t deal with the financial issues that a person has.
3. Poor Spending Habits: If you are prone to overspending and find it difficult to follow a budget, then using one credit card to repay another one could lead to a situation where an ever-increasing amount of debt is accumulated.
Steps to Take When Struggling to Pay Your Credit Card Bill
If you are struggling with the minimum monthly payment on your existing card, a balance transfer is not the solution as you will still have to pay off the new card.
Consider these alternatives:
1. Contact your card issuer: Many credit card companies have designed programs that can help customers such as forbearance or modified payment plans.
2. Seek credit counseling: Non-profit credit counseling agencies are often the first step in assessing your situation, and they may even help you set up a debt management plan to negotiate with creditors for lower payments or interest rates.
3. Debt settlement: If your situation is critical, you can opt for a settlement with your creditors by paying less than what you owe.
4. Bankruptcy: As a last resort, filing for bankruptcy could provide relief, but it comes with serious consequences for your credit and finances. Only consider this option after exploring all others.
Can I Earn Points By Paying One Card with Another?
Unfortunately, the only way to get credit card points is by spending money on the card.
Because balance transfers and cash advances, which require one card to pay off another, are not considered purchases that meet qualifications by credit card issuers.
As a result, it means that you will not receive any points, miles, or cash back when you choose this payment method.
It is critical to take into consideration this limitation and also the overall financial implications before making a balance transfer or cash advance.
Although it can be a tempting way to manage debt or to get cash, you must evaluate whether it is the right option for you in this case.
How Do I Pay Off Debt with a Credit Card
Settling a debt with a credit card takes time, but there are some steps that you can take to get to where you need to be.
Secondly, take stock of all your debt, which involves listing down everything you owe as well as the interest rates. This clarity is important for your planning process.
If you are opting for the balance transfer card, be sure to know about the 0% intro APR period and the monthly installments you need to pay to clear the debt before the period ends.
A budget plan and rigorous adherence to it is a must. Don’t forget about late fees. They will just accumulate your debt! Therefore, try to be consistent and consider automatic payments.
The first step to take is to pay off the debt with high interest rates which will help you to save money in the long run. Exploit the 0% intro APR offer to the fullest to manage this debt without having to pay more interest.
Track your credit report and score to measure the improvement. Set up account alerts for due dates to keep up with the payment dates. Balance transfer cards are not the only solution as well.
If it is not suiting you, try debt management services or personal loans with low interest rates instead.
You can’t pay your credit card statement using another credit card.
If you’re considering a balance transfer or cash advance, it’s a good idea to consider what additional fees may be involved before pursuing them.
The time it takes for a balance transfer to go through can vary widely, ranging from just a few days to several weeks.