Can You Pay A Credit Card Bill With A Credit Card?

Paying off credit card debt is a common financial goal for many people. With high interest rates and seemingly endless monthly bills, credit card debt can feel like a heavy burden. This leads some people to wonder – can I use one credit card to pay off another?

The short answer is generally no. Most credit card companies do not allow you to pay your credit card bill directly with another credit card. However there are some alternative options like balance transfers and cash advances that essentially allow you to access funds from one credit card to pay off another.

While these options exist, they come with risks, fees, and other downsides that you need to fully understand. Blindly moving debt around from card to card is unlikely to solve the underlying issues and could potentially make your situation worse.

In this comprehensive guide, we’ll explore:

• The reasons you generally can’t pay a credit card with another credit card
• What balance transfers and cash advances are
• The pros and cons of using these alternatives
• Strategies for more effectively paying off credit card debt

Why You Typically Can’t Pay A Credit Card Bill With Another Credit Card

Most credit card issuers explicitly prohibit cardholders from paying their bill with another credit card. The reasons largely come down to risk and processing fees.

From the card issuer’s perspective allowing open credit card-to-credit card payments introduces risk and uncertainty into the lending system. For example if Jane uses her Visa to pay the bill on her Mastercard, and then charges more to the Mastercard, the new transactions are not connected to any actual income or assets. This could propagate a cycle of “robbing Peter to pay Paul” that increases risk for lenders.

In addition, credit card processing networks like Visa and Mastercard charge fees to card issuers on every transaction. Letting cardholders pay other credit cards would expose issuers to fees without them making any interest income.

For these reasons, most cardholder agreements specifically prohibit using a credit card to pay other credit cards or loans held at other financial institutions. Trying to do so may result in payments being rejected, accounts closed, or other penalties.

Balance Transfers – What They Are And How They Work

While you can’t directly pay a credit card bill with another credit card, you can transfer balances between them.

A credit card balance transfer involves moving an existing balance from one card over to another. Many credit card companies offer special balance transfer offers, such as:

• 0% introductory APR for 12-21 months
• Waived balance transfer fees
• Other incentives like bonus rewards

These promotions aim to attract new customers by letting them save on interest and consolidate debt into one place.

To do a balance transfer, you open a new credit card that offers a promotional 0% interest rate. You submit a request to the new card issuer to transfer an exact balance amount from the old card. The issuer then pays off the old card directly and transfers the balance to your new account.

As long as you pay off the entire balance by the end of the intro 0% APR period, you avoid all interest charges. This can save you hundreds or even thousands of dollars compared to high-interest cards.

Balance transfers allow you to strategically use one credit line to pay off and consolidate another. But this option comes with some caveats.

The Downsides and Risks of Balance Transfers

Balance transfers can provide interest savings in the short term, but they require caution and planning to avoid pitfalls:

• Balance transfer fees – Most balance transfer offers charge an upfront fee of 3-5% of the transferred amount. On a $5,000 balance, a 3% fee would equal $150.

• Deferred interest – If the balance is not fully paid off by the end of the intro period, all the deferred interest accumulated over those months gets added to your balance. This can lead to unexpected jumps in your balance and minimum payments.

• Ongoing charges – Transferred balances do not make old accounts go away. You have to continue paying minimums on the original card if a balance remains.

• Credit score impact – Applying for a new credit card triggers a hard inquiry that can modestly ding your credit score in the short term. Too many new accounts at once hurts your score more significantly.

• Prepayment penalties – Some card issuers penalize you for closing accounts too soon after doing a balance transfer. They may charge back all the interest saved as a penalty.

• High perpetual rates – The standard APR after the intro period often jumps above 20%. If you carry an ongoing balance, the interest charges can rapidly outweigh any initial savings.

Overall, balance transfers should be used strategically and carefully to maximize savings while minimizing risks. They work best for those with good credit scores and the means to fully pay off balances quickly.

Should You Take Out A Cash Advance To Pay Off A Credit Card?

Cash advances allow you to borrow against your existing credit line to receive cash immediately. The cash can then be used to pay off balances on other credit cards or loans.

You can obtain a cash advance from an ATM, bank teller, or by using checks linked to your credit card account. However, cash advances carry even more risks and costs compared to balance transfers.

The costs and risks of cash advances include:

• High interest rates – Cash advance APRs are usually over 25%, even from introductory periods. This is considerably higher than purchase rates.

• Immediate interest accrual – Unlike purchases, interest starts accruing immediately on cash advances without any grace period.

• Cash advance fees – Separate fees usually apply, either a flat amount or percentage of the advance.

• Lower limits – Cash advance limits are usually lower than your total credit line. You may not be able to draw enough to fully pay other cards.

• No rewards – Cash advances do not qualify for credit card rewards programs.

• ATM fees – If obtaining the advance from an ATM, the machine operator will charge an additional transaction fee.

Overall, the astronomical costs and fees make cash advances one of the worst ways to try and pay off other credit card debt. They should be avoided in nearly all cases.

Other Alternatives For Paying Off Credit Card Debt

While balance transfers can provide some benefits, and cash advances should typically be avoided, there are other alternatives for effectively tackling credit card debt:

• Debt avalanche method – Target highest interest debt first while making minimums on everything else. This saves the most in interest.

• Debt snowball method – Pay off smallest balances first regardless of rate, building momentum and freeing up cash flow.

• Debt consolidation loans – Banks and credit unions offer fixed-rate, fixed-term unsecured debt consolidation loans. These simplify payments into one monthly loan bill.

• Home equity loan – Taps available equity in a home to provide funds to pay off high-interest debt all at once. Comes with risks of putting your home on the line.

• Non-profit credit counseling – Reputable non-profit agencies provide free education, coaching, and debt management services.

• Balance transfer card hacking – Super users apply for a series of balance transfer cards with extended 0% windows to continuously evade interest. Requires strict attention to timing.

• Debt settlement – Negotiating directly with creditors or via an agency to settle balances for less than full amount owed. Can damage credit badly if debts go unpaid for long stretches.

Depending on your specific credit card debt situation, certain methods will make more sense than others. Seeking help from a non-profit credit counselor is always a wise first step when debt feels overwhelming.

Key Considerations When Exploring Ways To Pay Off Credit Card Bills

If you find yourself seeking ways to pay off credit card bills by shifting debt around, take a step back first and consider the root causes:

• Overspending – Are you routinely charging more than you can realistically afford to pay back monthly? Getting spending under control is key to any debt reduction method.

• High interest rates – Shop around for cards offering 0% promotional periods so that every dollar goes toward principal vs interest.

• Unexpected emergencies – Hardships happen. See if cards offer deferment programs to temporarily pause required payments in a bind.

• Lack of budgeting – Do you know where your money is going each month? Detailed budgeting and tracking helps identify waste and opportunities to redirect cash to debt repayment.

• Job loss or income reduction – Consider speaking with issuers about hardship programs or reduced minimum payments until you regain your income footing.

Attack credit card debt strategically and methodically. While you cannot directly pay one card with another, carefully used balance transfers or consolidation loans can provide cost savings in the right circumstances. But focus first on the core reasons driving debt, from overspending and budgeting to job loss, so that you can pay off cards responsibly and sustainably over the long-haul.