Can You Pay Off a Credit Card With Another Credit Card?

Using one credit card to pay off another is a strategy some people consider when trying to manage credit card debt. However, directly charging one card to pay the bill of another is rarely possible. While you cannot simply charge one card to pay off another, alternatives like balance transfers and cash advances allow accessing “cash” from a credit card to pay bills. However, these options come with their own sets of pros, cons, and fees. Carefully evaluating your financial situation is necessary before utilizing these options.

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

Most credit card companies do not allow cardholders to charge another credit card bill directly to their card The credit card networks like Visa, Mastercard, American Express, and Discover prohibit transactions that fund other credit accounts The primary reasons are

• Risk of Not Paying—Letting cardholders charge other credit card bills could make it more likely that they won’t pay if they take on too much debt.

• Cash Advances: Using a credit card to pay off other credit cards is a lot like getting a cash advance, which usually comes with fees and higher interest rates. The networks want to discourage this practice.

• Fears of Money Laundering: Credit card companies want to keep fraud from being linked to money laundering or other illegal activities. Charging credit card bills could disguise sources of funds.

You can’t directly charge one credit card bill to another, but there are a few ways to get around that. Balance transfers and cash advances are two examples. However, these come with their own sets of considerations.

How Balance Transfers Work

A balance transfer allows you to transfer debt from one credit card over to another card. Many credit cards offer promotional balance transfer offers, such as 0% interest for 12-18 months. If your goal is consolidating multiple credit card balances to simplify repayment, a balance transfer can be a good option.

Here are some key things to know about balance transfers:

• You typically need to qualify and open a new credit card account to conduct a balance transfer.

• The amount you transfer cannot exceed the limit on the new card.

• A balance transfer fee usually applies, such as 3% of the transferred amount.

• 0% promotional APR periods eventually expire, so have a repayment plan.

• You need to continue making at least the minimum payments on both credit cards.

• Multiple balance transfers can negatively impact your credit score.

Overall, balance transfers allow accessing funds from a new credit card to pay off an existing card. Just make sure to compare the costs and have a repayment plan for after the promotional period.

How Cash Advances Work

A cash advance is another way to access cash from an existing credit card. You can take a cash advance by:

• Withdrawing cash from an ATM with your card
• Getting cash back above your purchase amount when making a retail transaction
• Using checks linked to your account to pay other bills
• Transferring money to your bank account

Cash advances allow flexibility to pay off other bills or expenses. However, the costs are typically much higher compared to balance transfers:

• Fees – Cash advance fees apply, either a percentage (3-5%) or flat fee ($10-$15).

• Interest Rates – Cash advance APRs are usually much higher than purchase rates, sometimes over 25%.

• No Grace Period – Interest accrues immediately on cash advances, with no grace period.

Given the high costs, cash advances should only be used as a last resort. A balance transfer is often the cheaper method to pay off a credit card bill with another credit card.

Pros of Paying a Credit Card With Another Card

Despite the risks and fees, there are some potential benefits to using balance transfers or cash advances to pay credit card bills:

• Lower Interest Rates – Transferring to a card with a lower promotional APR can reduce interest costs.

• Consolidate Balances – Combining multiple card balances into one can help simplify repayment.

• Access Funds – For short-term cash flow issues, cash advances provide access to funds.

• Earn Rewards – Some balance transfer cards offer rewards for transfers.

However, the pros above need to be weighed carefully against the cons below before making a decision.

Cons of Paying a Credit Card With Another Card

There are also drawbacks to be aware of when using a balance transfer or cash advance to pay a credit card bill:

• New Fees and Interest – Balance transfer fees and cash advance costs add to your debt.

• Credit Score Impacts – Too many balance transfers or cash advances can lower your credit score.

• Prepayment Penalties – Some card companies charge a fee if you pay off a balance transfer early.

• Accruing More Debt – Accessing more credit to pay bills can lead down a slippery slope of debt if you aren’t careful.

• Disqualification – Poor credit scores may disqualify you from the best balance transfer offers.

• Tracking Multiple Accounts – Having balances on multiple cards means having to track several statements and payment due dates.

Tips for Paying Off Credit Card Debt

If you currently carry credit card balances, here are some tips to pay down your debt in an efficient and affordable way:

• Consolidate debts onto the card with the lowest interest rate to simplify repayment.

• Create a budget to maximize the money available to make credit card payments. Look for ways to cut expenses and direct those savings towards debt repayment.

• Pay more than the minimums to reduce debt faster. Pay as much as you can each month.

• Prioritize the highest interest balances first. Funnel any extra payments towards the most expensive debt.

• Consider a personal loan to consolidate card balances at a potentially lower and fixed interest rate compared to credit cards.

• Avoid accruing new debt on the paid off cards until the balances are gone. The goal is to become debt-free.

When Can Paying With a Card Make Sense?

Despite the risks, are there cases where using a balance transfer or cash advance to pay a credit card bill can be reasonable? Here are some examples:

• You have a major one-time expense that you need to finance across multiple cards. Doing a balance transfer to consolidate the balances at a lower promotional rate may save substantially on interest.

• You have a financial emergency and urgently need cash. A cash advance, while expensive, provides funds until you receive your next paycheck or tax refund.

• You have a 0% balance transfer offer with a fee lower than the interest you would otherwise pay during the promotional period. It makes mathematical sense to transfer the balance.

• You occasionally float a small purchase across billing cycles with a cash advance, but pay it back promptly to avoid interest. The convenience may be worth the small one-time fee.

Even in these cases, alternatives like personal loans or HELOCs may be cheaper than balance transfers or cash advances. Only use credit cards to pay other cards as a last resort and temporary bridge after evaluating all options.

Summary

In most cases, you cannot directly pay a credit card bill with another credit card. Cash advance and balance transfer options allow accessing “cash” from cards to pay other debts, but can be expensive. Carefully consider your financial situation, credit score, spending habits, and repayment timeframe before using these tools. Oftentimes, better options exist to consolidate and pay off credit card debt in a more affordable way. But in certain circumstances, strategically leveraging balance transfers or cash advances can help manage credit card bills. Just approach with full knowledge of the risks and costs.