Can You Pay Off One Credit Card With Another Credit Card?
In this article:
- Can You Pay a Credit Card Bill With Another Credit Card?
- How Can You Use One Credit Card to Pay Another?
- How to Pay a Credit Card With a Cash Advance
- Using a Balance Transfer to Pay Another Credit Card
- The Pros of Using One Credit Card to Pay Another
- The Cons of Using One Credit Card to Pay Another
- Final Thoughts on Using One Credit Card to Pay Another
Can You Pay a Credit Card Bill With Another Credit Card?
No, typically you cannot directly pay off a credit card using another as your form of payment. However, you can do so indirectly.
There are two credit card resources that you can use to pay the balance of another.
How Can You Use One Credit Card to Pay Another?
There are a couple ways you can use one credit card to pay the balance of another:
1. Taking out a cash advance.
2. Using a balance transfer.
Knowing what these options entail, as well as the pros and cons of each, can help you decide if either approach is the right financial move for you.
How to Pay a Credit Card With a Cash Advance
A cash advance is a short-term loan from a credit card issuer, allowing a cardholder to use their credit card at an ATM or bank to take out cash against their line of credit for immediate use.
Cardholders may choose to take out a cash advance on one credit card, deposit those funds into a bank account, and then use them to then pay off the balance of another credit card. The main thing to remember, however, is that a cash advance is a loan from the credit issuer, so it must be paid back with interest.
Using a Balance Transfer to Pay Another Credit Card
A balance transfer is exactly what it sounds like: transferring the balance of one credit card to another card. Credit card companies may offer cardholders the opportunity to transfer other credit card balances to their account with them—oftentimes with low- or no-interest introductory rates—or cardholders may apply for a new card that allows them to transfer a different balance to the new one.
The idea is the cardholder takes the balance from a higher-interest card and transfers it to a different or new account with a lower interest rate. Depending on how much is transferred, this option allows cardholders to clear the balance of one credit card by transferring it to another, which they are now responsible for paying as one balance.
The Pros of Using One Credit Card to Pay Another
Done responsibly, there are some benefits to using a cash advance or a balance transfer to pay off a credit card bill.
- Pros of cash advances
Taking out a cash advance provides you immediate access to cash that you may not have had, allowing you to pay off your balance quickly and avoid interest charges or late payment fees on that balance.
- Pros of balance transfers
Balance transfers allow you to simplify your finances by consolidating multiple accounts into one, reducing the chance of forgetting or making a late payment.
Plus, if you get a low- or no-interest introductory period with your balance transfer, you have the opportunity to pay less interest on debt that was originally on an account with a higher rate, saving you money and allowing you to pay off your debt quicker.
The Cons of Using One Credit Card to Pay Another
There are also potential disadvantages to using a cash advance or a balance transfer to pay off a credit card bill.
- Cons of cash advances
There are plenty of potential downsides to taking out a cash advance to pay a credit card bill. Primarily, it’s important to remember that cash advances are loans and must be paid back as such. They typically come with high interest rates and additional fees—such as cash advance fees and ATM fees—and usually do not come with any grace period, meaning interest starts accruing right away. All in all, cash advances can be very expensive and, without a proper plan in place to pay it off, can lead to additional credit card debt.
- Cons of balance transfers
Balance transfers also come with potential risks. They do not reduce debt, they simply move it from one account to another. They also potentially come with fees such as balance transfer fees, and—if the balance hasn’t been fully paid off during the introductory rate time period—the remaining amount will begin accruing interest charges. Plus, the lower promotional interest rate may only apply to the balance transferred and not any subsequent purchases. All of this means that a balance transfer could be expensive and potentially lead to additional debt.
Balance transfers can also potentially cause your credit score to go down. If you opened a new credit card to complete the balance transfer, a hard inquiry was likely made when the credit issuer reviewed your credit report as part of the application process. Each hard inquiry typically lowers your credit score by five points or less.
Also, once the transfer is complete, be sure to pay close attention to your credit utilization ratio as this can impact your credit score.
Final Thoughts on Using One Credit Card to Pay Another
While balance transfers and cash advances can both be short-term solutions to paying off credit card debt, they are not a replacement for healthy financial planning and management as they both come with long-term risks. The best way to pay down credit card debt and build a healthy credit score, after all, is by making timely payments every month of at least the minimum amount due. However, if you do choose to explore one of these options to pay off your credit card bill, it’s important to do your homework first and weigh the pros and cons based on your financial situation before committing to them.