Can You Pay A Credit Card With A Credit Card, And Is It Wise?

Have you ever considered if it’s possible to pay off one credit card with another? Technically, there is an indirect way to do it. However, whether it's a good idea or not is where things get a bit more complicated. Although it might seem like a straightforward solution, there are more factors to consider than meets the eye. Let's review the possibilities to determine whether using a credit card to pay off another one is wise.

Can You Pay A Credit Card With Another Credit Card?

Generally speaking, you can’t pay a credit card with a credit card. However, utilizing balance transfers and cash transfers make it possible to pay off credit card debt with credit cards.

Paying Off Credit Card Debt With A Balance Transfer

A balance transfer is a process of moving the outstanding balance from one credit card to another in order to take advantage of lower interest rates or promotional offers. You start by applying for a new credit card that offers a balance transfer option. Once approved, you provide the details of the existing credit card/cards and the amount you want to transfer. The new credit card issuer will pay off the balance on your old card/cards directly, transferring the debt to your new card.

The main benefit of a balance transfer is obtaining a lower interest rate on the transferred balance, especially if the new card offers an introductory period with 0% APR (annual percentage rate) for a specified duration. This can relieve high-interest payments and help you pay off the debt more quickly. While some balance transfer offers come with no fees, others may charge a fee based on the transferred amount, typically around 3% – 5%. It's essential to factor in these fees when considering a balance transfer, as they can impact the overall cost-effectiveness of the process. Credit card issuers usually extend balance transfer offers to only individuals with good credit scores.

For example, let's say you have a credit card with a $5,000 balance and a high interest rate of 20%. You apply for a new credit card that offers a 0% APR on balance transfers for the first 12 months with a 3% balance transfer fee. After approval, you transfer the $5,000 balance to the new card, paying a $150 balance transfer fee. During the promotional period, you can focus on paying off the transferred balance without accumulating additional interest, potentially saving hundreds of dollars in interest payments.

Advantages And Disadvantages Of Using A Balance Transfer To Pay Off A Credit Card

Paying Off Credit Card Debt With A Cash Advance

With a cash advance, you’re basically borrowing money from your credit card by withdrawing cash from an ATM or bank. However, unlike regular credit card purchases, cash advances start accruing interest immediately, and often at higher rates, and typically come with additional fees for obtaining cash this way. Therefore, using a cash advance to pay off another credit card isn’t typically the best way to go compared to a balance transfer.

For instance, if you take an advance of $500 cash from your Capital One Venture Rewards Credit Card, you’ll be charged a fee between 3% – 5%, and if you do the transaction at a non-Capital One ATM, additional fees could apply. The cash advance APR can range between 24% – 30% and apply beginning on the transaction date. Interest accrues daily until the balance is paid in full. So even though you get the cash fast, it could end up costing you significantly more in the long run.

Advantages And Disadvantages Of Using A Cash Advance To Pay Off A Credit Card

FAQs About Paying A Credit Card With A Credit Card

Can I pay a credit card with a credit card?

Technically, it's possible to pay off one credit card by using another through balance transfers or cash advances. For a more detailed explanation of these methods, please refer to the earlier section titled "Can You Pay A Credit Card With Another Credit Card?”.

Why can’t I pay a credit card with a credit card?

Credit card companies usually don't permit direct payments from one credit card to another as it can create a cycle of debt and financial instability for the borrower. Instead, they provide other options such as balance transfers or cash advances, which come with associated fees and interest rates.

What if I can’t pay my credit card bill?

If you're struggling to pay your credit card bill, it's important to take action to avoid further financial problems. Consider reaching out to your credit card issuer to discuss hardship options or seek credit counseling services. Missed payments can negatively impact your credit score, so it's crucial to address the issue promptly.

Do balance transfers affect my credit score?

Balance transfers can temporarily impact your credit score, mainly due to the new credit inquiry and changes in credit utilization. However, if managed responsibly, they can ultimately help improve your credit score by reducing overall debt and making payments more manageable.

What are alternative ways to pay off credit card debt?

There are a few different ways to pay off credit card debt. One method is credit card debt consolidation via taking out a personal loan. This can help reduce your debt and get control of your financial situation. You can also set up automatic payments that deduct money from your checking or savings account on the dates you specify. In addition, you can use different debt reduction strategies, such as the debt snowball method. You make the minimum payment on all but your smallest debt, and work to completely pay the smallest one off. Once that’s done, the freed-up funds can then be applied to tackle the next debt, and so on. These methods can assist you in managing your payments, decreasing interest charges, and ultimately becoming debt-free.

The Bottom Line: Know The Risks Of Paying Off A Credit Card With A Credit Card

As you can see, technically, it's feasible to use a credit card to pay off other credit card debt by utilizing balance transfers or cash advances. However, it's essential to carefully weigh the potential advantages and disadvantages. On one hand, these options can provide temporary relief and help consolidate debt into more manageable payments. However, they often come with fees, higher interest rates, and potential risks to your credit score if not managed effectively. Therefore, assessing your financial situation and exploring alternative strategies before using a credit card to pay off another is vital.

If you have access to another card offering a 0% interest balance transfer, utilizing this option may make sense. However, it's crucial to ensure that you can repay the debt before the 0% offer expires to avoid accruing additional charges. Otherwise, the most effective approach to reducing credit card debt is by creating a budget, adhering to it diligently, and gradually reducing the debt each month. 

If you want to get your spending on track and mitigate any future risks with credit card debt, download the Rocket Money^SM app today.