The short answer is yes: you can pay down your credit card balance with another one. But like everything else involving finances and credit, it’s more complicated than that.
When finances get tight, it can be tempting to reach for your credit cards more often. However, if you start paying expenses with your credit cards too often — particularly without paying off the balances each month — it will only be a matter of time before you start accruing debt. This is a very common concern, with the average American carrying over $6,200 in credit card debt.
Your credit card debt may start to pile so high that you might begin wondering: can you also handle credit card payments with a credit card? Or, better yet, can you pay off a credit card balance entirely with another card?
If you have multiple credit cards, this is a question that has crossed your mind at least once before. Sometimes, you just need to delay a credit card payment; other times, you might have few alternatives. If you are desperate for funds, and are considering solutions such as payday loans or title loans, then you should definitely consider using your credit card.
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How to Pay a Credit Card With a Credit Card
Below, you’ll find a couple different approaches to paying off your credit card balance with another credit card, as well as the risks and considerations involved with each.
Perhaps the most straightforward method of handling credit card payments with another credit card is to take a cash advance. This entails going to an ATM and drawing out cash with your credit card instead of a bank account, though doing so will typically involve substantial fees. These include an upfront cash advance fee, cash advance interest rates (which are typically higher than your card’s standard APR), and any applicable ATM or bank fees.
These fees can add up quickly. For example, let’s say you need to withdraw $200 from one credit card in order to afford the minimum payment of another card. In this hypothetical scenario, you’re expected to pay a:
- 5% cash advance fee: $10;
- 25% variable APR: $28.11 if you hold that debt for a year;
- A flat ATM fee: $10.
For the privilege of making your credit card payment on time through a $200 cash advance, you can easily pay nearly a quarter of the amount you borrowed: $48.11.
Cash advances are basically loans, and they carry high interest rates. Moreover, they go in effect immediately. It’s not like a regular credit card bill, where you have a certain amount of time before your due date to pay without interest. With a cash advance, you will always pay more than you received.
As you can see, this is a good approach to handling a payment when you have few alternatives, but it isn’t a sustainable approach for long-term financial health.
What if you want to pay off your credit card balance entirely? It’s very unlikely that your lender will let you just pay off your credit card with another credit card directly. However, a balance transfer may not be out of the question.
Before committing to a balance transfer, however, it’s important to determine which of your cards has the lowest APR; this will be the ideal candidate for a balance transfer. If you do not already have too many credit cards, note that many credit card offers include an introductory period of zero APR, meaning that you won’t have to pay interest temporarily. Instead of paying for your credit card bill with an old, existing card, you would get a new card and pay it off with that one.
This is a great way to consolidate your debt. It can be a great tactic if you’re struggling to deal with a perpetually increasing interest on your current balance. You can use this reprieve from interest fees to begin to make a serious impact on your credit card debt.
Note, however, that there are three downsides to this approach:
- Most commonly, there is some sort of fee for a balance transfer. See how much it is before you open a new line of credit.
- Opening a new line of credit will be reported to the credit bureaus, and though it’s unlikely that opening a single account would cause a significant dip in your credit, you might want to wait a bit before applying for a big loan.
- That introductory APR period will end at some point. Balance transfers don’t so much solve the problem as put them on pause, but sometimes that’s all you need.
Alternatives to Paying a Credit Card With a Credit Card
As noted above, cash advances and balance transfers carry some substantial costs. Considering these, it’s important that you thoroughly explore any alternatives to paying off a credit card balance with a different card — stopping short, of course, of missing any credit card payments.
- Negotiate with your credit card company: It’s important to understand that you, as a customer, are a valuable asset to credit card companies. As such, you may have room to discuss terms and conditions. There are many potential benefits to negotiating with your credit card company. Getting your APR reduced or outright settling outstanding debt can dramatically improve your financial situation going forward.
- Seek financial aid: If you qualify, it may be prudent to seek out financial aid, such as welfare or disability assistance, to avoid leaning on cash advances to handle credit card payments. This aid can help you find some wiggle room in your budget to afford credit card payments without accruing excessive fees.
- Earn additional income: There are many avenues you can take to earn some extra income each month. Seeking a second job, taking on some side hustles, or selling your unneeded stuff can help you afford credit card payments.
Ultimately, just like with any loan, you have to weigh the pros and cons to your unique situation. Debt is never a fun thing to carry around, but most of us have it at some point. Sometimes, life gets the best of us, and things like cash advances and balance transfers can keep us up to date on payments.
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