How To Pay a Credit Card With a Credit Card

Can you pay a credit card with a credit card? The short answer is yes. But if you’re not careful, it can cost a lot of money. Here’s how to do it for free.

Technically, you can use a credit card to pay another credit card, although you probably won’t be able to do this directly. Most issuers won’t allow you to just punch in another credit card number online to make your payment.

But there’s a way around this: You can take a cash advance from one credit card at an ATM, deposit the money into your checking account, then use those funds to pay your other card. Alternatively, you could use the convenience checks sent by your credit card issuer to make a deposit into your checking account and achieve the same effect.

Keep in mind, though, that both of these approaches carry significant costs. Cash advances (taken from an ATM or through the use of a convenience check) typically carry a much higher interest rate than the one you’re paying on purchases. Also, your issuer will charge you a cash-advance fee of 2% to 5% just for tapping the funds. As a result, using these methods to make a credit card payment should be considered a last resort.

Technically, you can pay a credit card with a credit card, but whether or not you should is an important question.

If you’ve ever wondered how you can rack up more credit card rewards, you may have asked yourself the question, “Can you pay a credit card with a credit card?”

The short answer is no, at least not in that way. Credit card issuers typically don’t accept credit cards as a regular payment method. Rather, they generally request that you make your payment using your checking or savings account, or with cash or check at a local branch, ATM, over the phone or by mail.

But if you’re carrying a balance on a high-interest credit card, you can do what’s called a balance transfer.

“Balance transfers allow you to take the balances on your existing cards and transfer them to another credit card,” says Aaron Aggerwal, assistant vice president of credit card lending at Navy Federal Credit Union.

Several credit cards offer a 0% introductory APR on balance transfers for a set promotional period. But before you try it, there are a few things you should consider.

With a promotional rate that comes with many balance transfer cards, you can reduce the amount of finance charges associated with the balance and better position yourself to pay off the debt, Aggerwal says.

Alternatives to Paying a Credit Card With a Credit Card

While balance transfers work in certain situations, they’re not your only option.

Here are some alternative ways to pay off credit card debt:

Personal Loans

Since they often have lower interest rates than credit cards, it sometimes makes sense to use personal loans to pay off credit card debt.

If you pay off multiple cards with one personal loan, you’ll also consolidate several statements and due dates into one monthly bill. And, because personal loans are “installment loans” — rather than “revolving” like credit cards — this approach could boost your credit scores, too.

Home Equity Loans

For homeowners with some equity in their mortgage, a little-known strategy is to pay your credit card with a home equity loan (HELOC).

If going this route, proceed with extreme caution. Paying a credit card with a HELOC means putting up your house as collateral for your debt — which means you could lose your house over missed payments.

0% APR Credit Cards

Instead of transferring Card A’s balance to a new card — and therefore paying balance transfer fees — you could open up a 0% APR card (Card B) and charge your everyday expenses to it.

Then, after making just the minimum payment on Card B, you could use the cash you’ve freed up to pay off Card A (and its higher interest rate).

As with the HELOC method, this strategy comes with risk. You should only pursue it if you know you’ll pay off the 0% APR card before its introductory period is over. Otherwise, you’ll end up in a worse situation than you’re in now.

Debt Avalanche or Debt Snowball

These are two different debt payoff strategies:

  • Debt avalanche: Pay off your loans in order of interest rates, from the loan with the highest interest (probably your credit card) to the lowest interest (probably your mortgage or student loans).
  • Debt snowball: Pay off your loans in order of balance owed, from the loan with the lowest balance to the loan with the highest balance.

We discuss both in more detail in our post about how to pay off debt. Unless you need some serious motivation, we recommend the avalanche because it’ll save you the most money in interest.

Ready to Pay a Credit Card With a Credit Card?

If you’ve read the sections above, and have decided a balance transfer is the best solution for you, then here’s everything you need to know about how to transfer a credit card balance.

You can also scope out our picks for the best balance transfer credit cards.

Be responsible with your balance transfer: Make on-time payments on your new card, and strive to pay off the balance before the intro APR period ends. If you keep your old card open, don’t put any additional charges on it.

Paying a credit card with a credit card can be helpful in a pinch — as long as you take steps to avoid falling deeper into credit card debt.

Can You Pay a Credit Card With a Credit Card to Get Points?

We’ve got some bad news for all you points junkies out there: Unfortunately, you can’t earn rewards when transferring a balance.

As you might know, the best way to amass a lot of points is to land big signup bonuses. With the Chase Sapphire Preferred Card (Review), for example, you could earn 50,000 points for spending $4,000 on the card in the first three months. But only regular purchases count towards these spending requirements — not balance transfers.

So if you’ve already signed up for a new card and are trying to meet the minimum spend, consider paying your rent with a credit card. Although you’ll pay fees, it could help you snag that lucrative bonus.

Options for Paying off One Credit Card With Another

There are several ways to pay off one credit card (Card A) with another (Card B).

One option is to take a cash advance from Card B and then use the cash to make a payment to Card A. However, watch out for cash advance fees (which are typically a percentage of the withdrawal amount) and possibly a higher interest rate, which also may start accruing from the day you take the cash advance.

Paying off One Credit Card With Another to Take Advantage of a Low Rate or Special Offer

Are you thinking of using one credit card to pay off the balance on another credit card because of a special low rate (or zero rate) offer? Known as a balance transfer offer, this may be a good way to reduce the interest you’re currently paying on a credit card balance.

If you’re considering accepting a balance transfer offer, read the fine print carefully. Watch for the following:

  • End date of the special rate offer — after this date, the balance on the card will revert to a different, higher interest rate
  • Whether additional purchases made on the card after a balance has been transferred will accrue interest at a higher rate
  • If there is a balance transfer fee for accepting the offer

When Transferring the Balance From One Credit Card to Another Is a Bad Idea

Sometimes paying off one credit card with another is a bad idea. It may not be wise if any of the following is true:

  1. You have a tough time making the payments on your card.
  2. You have difficulty sticking to your monthly budget and use your credit card for impulse purchases.
  3. You don’t plan to stop using the first card, which could then result in credit card balances and interest accruing on both cards.

Answering “yes” to one or more of these questions could indicate you have a larger problem with managing your money. Contact a financial advisor to discuss the best options for your financial situation.

Think carefully before paying one credit card off with another. If doing so will help you save on interest, consolidate your payments and pay your debt off faster, it can be a good idea. Yet, before doing so, add up the credit card fees you could be charged, to make sure transferring your card balance makes good financial sense.

Making Your Monthly Credit Card Payment

A credit card company will not accept payment via another credit card. For example, you can’t make your minimum monthly payment on a Discover Card with a Chase credit card. Discover won’t accept that form of payment.

The reason has to do with fees. If Discover were to accept credit card payments, they would have to pay what are called interchange fees to the bank that issued the credit card and to the card network (e.g., Visa or MasterCard). Most retailers pay these fees as a cost of doing business. But most finance companies (e.g., credit card issuers, mortgage companies) won’t.

Cash Advance or Convenience Check

We’re going with the worst method first.  

You know those “convenience checks” your card issuer sends in the mail? You could either cash one of those — or use your card to take a cash advance from the ATM — then deposit the money into your checking account and use it to pay your bill.

While it sounds easy, it’s a bad idea. Cash advances are expensive: They usually come with fees of up to 5% of whatever you withdraw, and they immediately start accruing interest (often at a rate of around 25%).

If you took out $1,000, for example, you’d owe about $70 in fees by the end of the month, and that amount would continue to increase each day until you paid off your debt.

Balance Transfer

A better alternative? Pay your credit card with a balance transfer.

Just like they sound, these involve transferring part or all of your balance from one credit card to another. You could, for example, transfer the balance from your Chase card to a new card from Citi. You usually can’t transfer balances between cards at the same bank.

Balance transfers can be an attractive option when the new card has a lower interest rate (APR) than your current card. In fact, many balance transfer cards offer 0% interest on transferred balances for a certain time period.

Not only can they tide you over when money is tight, but they can also provide an effective way to temporarily avoid paying interest on the credit card debt you already have.

Balance transfer cards aren’t always the best option

There are a few reasons you should think twice before applying for a balance transfer card. The first is that there’s no guarantee you’ll get a high enough credit limit to transfer your full balance.

And even if you get a high credit limit, most cards have limits on balance transfers that may be lower than your available credit. Also, most issuers won’t allow you to transfer balances from cards that you already have with them.

Your credit limit is typically determined based on certain credit factors, including the following:

  • Income
  • Credit scores
  • Payment history
  • Credit utilization
  • Housing costs

Second, applying for a balance transfer card could hurt your credit scores due to the hard inquiry. For example, every time you apply for a new credit card, you’ll likely receive a hard inquiry on your credit reports. A hard inquiry will lower your scores right away, but it usually only affects your scores for a short period of time.

And while the inquiry may remain on your reports for up to two years, it likely won’t affect your scores for that period of time. Also, if you end up closing the card you transferred the balance from, your scores could go down, as this will affect your credit utilization and the age of your credit history.

References:

[1] Can You Pay a Credit Card With a Credit Card? https://www.creditcardinsider.com/blog/can-you-pay-a-credit-card-with-a-credit-card/

[2] Can I Use One Credit Card to Pay Off Another? https://www.nerdwallet.com/blog/credit-cards/can-i-use-credit-card-to-pay-another-credit-card/

[3] Can You Pay a Credit Card Bill With Another Credit Card? https://creditcards.usnews.com/articles/can-you-pay-a-credit-card-bill-with-another-credit-card

[4] Can you pay a credit card with a credit card? https://www.creditkarma.com/credit-cards/i/pay-credit-card-with-credit-card/

[5] How to Pay a Credit Card with Another Credit Card for Free https://www.doughroller.net/credit-cards/can-you-pay-a-credit-card-with-another-credit-card/

[6] Can You Pay One Credit Card off With Another? https://www.discover.com/credit-cards/resources/pay-one-credit-card-off-with-another/