– How to Pay Credit Card with Another –
How to Pay Credit Card with Another: Paying the balance on one of your credit cards with a different credit card is possible. Yet when you make a credit card payment on a credit card, you don’t minimize your debt — you just transfer it from one account to another.
Whether or not this is a good idea depends on factors such as interest rates, your overall credit situation, and your debt situation. In this post, we’re going to give you everything you need to know.
Can You Transfer Money from a Credit Card to Another Credit Card?
Yes, if you have a credit card that allows balance transfers, you can move all or part of a balance from another card to it. You must keep the transfer below your credit limit, though. If you have a card with a credit limit of $3,000, for example, you can only transfer up to that amount.
Options for Paying off One Credit Card With Another
There are several ways to pay off one credit card (Card A) with another (Card B). The two primary ways to use a second credit card to pay the debt on a first credit card are to:
- Take a cash advance on the second card.
- Use a balance transfer to move the debt from the first credit card to the second card.
It Can Help you get low Rates but Watch Out
If you’re considering accepting a balance transfer offer, read the fine print carefully. Watch for the following:
- The end date of the special rate offer — after this date, the balance on the card will revert to a different, higher interest rate
- Whether additional purchases made on the card after a balance has been transferred will accrue interest at a higher rate
- If there is a balance transfer fee for accepting the offer
When Transferring the Balance From One Credit Card to Another Is a Bad Idea
Sometimes paying off one credit card with another is a bad idea. It may not be wise if any of the following is true:
- You have a tough time making the payments on your card.
- You have difficulty sticking to your monthly budget and using your credit card for impulse purchases.
- If you don’t plan to stop using the first card, which could then result in credit card balances and interest accruing on both cards.
Think carefully before paying one credit card off with another. If doing so will help you save on interest, consolidate your payments and pay your debt off faster, it can be a good idea. Yet, before doing so, add up the credit card fees you could be charged, to make sure transferring your card balance makes good financial sense.
Why a Balance Transfer allows you to Pay one Card with another Card
Usually, in a balance transfer, you shift the debt from one credit card to another. Most of the time, you would do so if the new card offered a far lower interest rate than the one added to the current card. For example, many credit cards give new customers a 0 percent interest on balance transfers for a limited period of time, usually between six and 18 months.
From now on, issuers can also offer special balance transfer promotions on existing cards as a means of motivating current cardholders to use more of their available credit.
If you have a lot of debt on another card – often at a high-interest rate of 20% or more – you would open a new card and transfer your existing debt to it – or to an existing card offering special balance transfer promotion.
This would leave you with no more debt on your high-interest rate credit card. Instead, the debt will now be on the new account, the one with an introductory interest rate of 0 percent.
Your debt does not rise due to interest over the 0 percent period. This should give you time to pay it down without worrying about a month-to-month increase.
When should I Pay my Credit Card Balance?
You should make at least a minimum payment every month before the due date of the statement in order to avoid negative impacts on your credit score. You can pay off your credit card balance at any point in order to reduce interest expenses — unless you have a 0 percent APR bid.
In this case, you will pay off the balance before the end of the repayment period in order to prevent excessive interest that might, in some cases, be backdated to the origination of the debt.
Can you Pay a Credit Card with a Credit Card to get Points?
Because cash advances and balance transfers are not eligible for credit card reward points, you can not earn miles or points by paying off your other credit cards. However, you can earn points with many reward cards by paying other bills, such as your mortgage or utility bill.
While the idea of using a credit card to pay for another credit card sounds appealing, it’s not as simple as making a monthly payment. Some balance transfer cards may offer attractive 0 percent introductory APR promotions, but drawbacks may outweigh the benefits to some.
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