- It is not allowed to make credit card payments directly with another credit card.
- You can use balance transfers or cash advances to pay a credit card bill with another credit card.
- Balance transfers are generally less expensive than cash advances.
Credit cards are useful tools to cover both planned purchases and unexpected expenses. They offer consumers a way to pay a lump sum upfront and then make smaller, more manageable monthly payments on their balance.
However, using credit cards can be a slippery track when they’re not handled thoughtfully. It can be easy to overspend and end up with high balances and large monthly payment obligations.
Millions of people miss a credit card payment or pay late every year. A 2021 WalletHub survey found that around one in six respondents said they expect to miss at least one credit card expiration date in 2022.
Consumers who are cash strapped and facing potential missed payments may consider using one of their credit cards to make a payment to another.
Can I pay for a credit card with another credit card?
A credit card payment cannot be paid directly with another credit card.
“But when there is a will, there is a way,” says Adem Selita, CEO and co-founder of The Debt Relief Company. “If a consumer really wanted to, he could technically use a balance transfer or take a cash advance on his credit card to pay for another credit card.”
Credit cards allow you to transfer the balance of one credit card to another. Balance transfers typically cost 1% to 5% of the transferred amount. For example, transferring $ 1,000 to a credit card that charges a three percent transfer fee would cost $ 30. Interest rates also apply.
With a cash advance, you borrow money from your credit card company and pay it back over time.
“For example, if your credit card has an APR of 18%, you could get an advance of $ 500 and repay $ 525 over time, for a $ 25 fee plus interest,” explains payments industry expert Kristin Uptain. and Marketing Manager for Redde Payments. “Some cards will also charge interest on the cash advance from the day it was withdrawn until it was fully repaid.”
While balance transfers and cash advances are available to consumers and can be used to make credit card payments, neither address the debt or help pay it off. They simply move the balance from one card to another.
How do credit cards work for balance transfers?
A balance transfer allows you to move part or all of your current balance to a new card. This is a popular choice when a credit card offers better terms. Credit cards sometimes offer low or even zero introductory annual percentage rates (APRs) for a specified period of time. There is usually also a balance transfer fee which is added to the balance.
To initiate a transfer, you can call your credit card company or use checks that are sometimes provided by credit card companies. A balance transfer will typically cost 4% of the amount charged, which is essentially the same thing as an upfront interest payment, Selita explains.
The biggest benefit of doing a balance transfer is that you can get a lower interest rate and never miss a monthly payment.
“If you’re looking for a short-term solution to your credit card debt, balance transfers can be a good option,” says Uptain.
The downsides of using a balance transfer to pay for a credit card payment are that they do nothing to reduce your total debt load, and if you don’t pay your balance before the introductory period ends, it can cost you high interest.
How do credit card cash advances work?
You can get a cash advance against your credit card limit and receive the money from an ATM or bank.
Consumers can instantly access the money from a cash advance, which is useful if they have to pay an invoice that is due soon. However, there are significant drawbacks to borrowing money via a cash advance.
Selita points out the most important consequence to be aware of: “Cash advance fees can be huge.”
In addition to the fees the credit card company will charge in the beginning (typically 3% to 5% of the total amount of the down payments), you are likely to pay significantly higher interest on the borrowed money. Some cards charge rates around 30%. It is also unlikely that you will have a grace period, which means that interest will begin to accrue immediately.
Of the two options, a balance transfer is the best move, according to Uptain.
“Cash advances are often used by people who have no other way to get money quickly,” he says. “In general, it is better to use a balance transfer than a cash advance.”
While you can use balance transfers and cash advances to pay for credit card payments, it’s not a wise financial move. Neither option helps you pay off your debt, and they can cost you even more in interest and fees. You may end up worse than before.
Alternatives to paying for a credit card with another card
Using credit to pay monthly credit obligations is generally not a good idea. Using credit cards to make payments only moves money, which can put you further into debt.
Instead of using a cash advance or balance transfer to cover monthly credit card payments, consider these five alternatives.
1. Get a personal loan
Applying for a personal loan from a bank or credit union can help you consolidate payments and guarantee a lower interest rate. Personal loans can decrease the total monthly payments required, especially if you carry balances on multiple credit cards.
A personal loan is a suitable form of debt consolidation. These rates start at a fraction of what credit cards would charge.
2. Borrow from friends, family or friends
Parents, siblings, or close friends who are financially stable may be willing to help a loved one with an interest-free loan. Borrowing from friends and family relieves the stress of worrying about paying late, which can drop your credit score if lenders report it to the credit bureaus.
3. Sell some things
If you’re looking for a short-term way to fulfill your credit card payments, why not get rid of some items you no longer need? There are several ways to sell clothing, jewelry, home decor, furniture, and electronics online. While this won’t completely erase your debt, you may be able to raise enough funds to keep the payments due.
4. Increase your income
If your bills amount to more than your income, think about a second job or a secondary hustle and bustle. Find a job online, take a few shifts at the mall, or drive for Uber or Lyft. A few hundred dollars more a month goes a long way to cover credit card payments.
5. Negotiate with creditors
Contrary to popular belief, the terms of your credit card aren’t written in stone.
“Lower the interest rate if possible,” advises Uptain. “If you have good or excellent credit, ask your issuer if they will lower your rate. They may offer a lower rate or waive annual fees if you have been a longtime customer, even if your account is in good standing – which can save you money. money on interest over time. “
The bottom line
Making a credit card payment with another credit card is indirectly possible using wire transfers and cash advances. However, these options are not recommended as they do not help reduce your debt burden. It’s smart to look for other ways to make credit card payments, so you can reduce the amount owed and possibly pay off the debt.
“Paying your credit card bill with another credit card is usually foolhardy,” says Selita. “There’s a reason credit card companies don’t allow these transactions to be done directly.”