Can I Use One Credit Card to Pay Off Another? – Newsweek Vault (2024)

Vault’s Viewpoint on Credit Card Use

• Issuers typically don’t allow you to pay your credit card balance or make a minimum payment with another credit card.
• If you’re looking for an alternative payment method, you can complete a balance transfer or secure a cash advance—though both options have their pros and cons.
• You may have other debt management options available to you too, including budgeting, personal loans or credit card hardship assistance.

Why You Can’t Pay Off a Credit Card With Another Credit Card

Credit card issuers do not allow bill payments via another credit card. You generally only have a few payment options, including:

• ACH bank transfers
• Checks
• Money orders
• Cash (if there is a physical location available)
• Online bill pay

While you can’t make a direct payment by using a separate credit card, it’s possible you can find a workaround with either a balance transfer or cash advance.

Alternatives to Paying Off a Credit Card With Another Credit Card

Let’s take a closer look at possible alternatives for making a credit card payment.

Balance Transfer

A balance transfer involves transferring your current credit card balance to another credit card. The existing balance can either be transferred to a new account you open or another card you already have. The best scenario is transferring a balance to a new credit card offering a 0% intro APR for a specific period of time, such as 12 to 21 months.

If you’re crunched for time, note that it can take days or weeks for the bank to finalize your transfer. Be sure to keep making (at least) your original card’s minimum payment so you can stay current. You’ll also need to factor in the card’s balance transfer fee if it has one, which typically falls between 3% to 5% of the amount transferred.

Cash Advance

A credit card cash advance, or a withdrawal against your credit card account, is another way of making a payment. Cash advances come in a couple of forms. You can use your credit card at an ATM and withdraw cash, which you can turn around and use for your credit card payment. You typically need a PIN to complete this type of transaction.

You can also use a convenience check provided by the credit card issuer or request a cash advance into your bank account. Like a balance transfer, you can expect a cash advance fee charged to your account, which may range anywhere from 1% to 5%.

Advantages of Using a Balance Transfer or Cash Advance for Debt Management

Paying off your credit card with the help of a balance transfer or cash advance may offer a few advantages.

Offers a Quick Solution

When it comes to cash advances, one of the biggest advantages is how quickly you can access the funds. You can often have funds transferred into your checking account with a simple online request or physically get cash from almost any ATM.

As mentioned above, the same speed doesn’t apply to balance transfers, which can take days or weeks to finalize.

You May Avoid Late Fees and Penalty APRs

If using a cash advance or balance transfer helps you make an on-time credit card payment, you can avoid any late fees or penalty APR, which is an increased APR a bank can charge anytime you don’t meet the account’s terms and conditions.

You May Pay Less Interest

If you’re able to take advantage of a 0% introductory APR with a new balance transfer credit card, you could end up saving a significant amount of money on interest, depending on your balance. The average interest rate for credit cards is currently hovering around 22.75%, according to preliminary Q4 data from the Federal Reserve, which can add up to hundreds of dollars even in a short amount of time.

Disadvantages of Using a Balance Transfer or Cash Advance

Before taking on either of these options, reviewing the potential downsides is equally important.

High Fees and Increased Interest Rates

The fees associated with a balance transfer or cash advance can add up. For example, if you have a $2,000 existing balance and your new balance transfer credit card charges a 5% transfer fee, then you’ll incur a $100 charge. It’s worth checking the fees for these actions (which you can find online within your credit card’s terms and conditions) and running a quick calculation.

The same goes for cash advance fees, but in addition to the cash advance fee, you could also face fees for using an ATM. You also face higher interest charges with cash advances; many issuers charge up to a 30% APR on cash advances. Unlike regular credit card purchases, cash advances accrue interest daily, which means you pay even more in interest.

Limits

Even if you can take advantage of a balance transfer or cash advance, you’ll have to work within the limits of the credit card company. Bear in mind that cash advances typically max out at a certain percentage of your credit line.

Increasing Debt

Without a solid payoff plan, you could end up stuck in a cycle of debt that quickly balloons out of control. Either strategy could end up being too risky for your finances, especially if you’re already struggling to make minimum payments.

Longer-Term Solutions for Debt Management

In general, you’re better off avoiding a cash advance or balance transfer unless you can improve your interest rate and save money in the long run or pay your balance within a short period of time. If you consistently feel as if you can’t make on-time payments for your credit cards, it may be time to craft a new debt management plan.

Budgeting

The first step worth considering is creating a budget or revisiting one you’ve already established. Try going through your last few months’ worth of expenses and identifying where your money goes. You may pinpoint areas where you can shift spending and put more toward paying off your credit card debt. You can use a budgeting app to make this step even easier.

Personal Loans

Another option for debt management is getting a personal loan for consolidation. A personal loan offers a lump sum of money upfront, and you can use the funds for a wide variety of expenses—including paying off your existing credit card balances.

Ideally, you can find a personal loan with a lower interest rate, which means you can save money on interest charges over time. Personal loans typically offer fixed interest rates and a fixed monthly installment plan, which can make budgeting easier.

Credit Card Hardship Assistance

If you’re struggling with the minimum monthly payment obligations from your credit card, try contacting your issuer and asking about available assistance. While it’s not guaranteed, a credit card company may be able to lower your monthly payment minimum or reduce your current interest rate. You can also request a different payment due date, which might better align with your income.