Can You Pay A Credit Card With A Credit Card?

You can pay a credit card with a credit card if you use a balance transfer or a cash advance. There’s typically no direct way to pay a credit card bill with another card because it’s not allowed by most credit card issuers.

If it’s going to save you money and pay off debt, we recommend doing a balance transfer. We don’t recommend taking out cash advances unless it’s your best option in an emergency.

Let’s explore how you can pay a credit card with a credit card to see which strategy is best for you.

Key takeaways

• You can’t typically pay a credit card directly with another credit card.
• Two options for indirectly paying a credit card with another credit card include balance transfers and cash advances.
• Balance transfers can be helpful for paying off debt if you can save more money on interest than what you have to pay in balance transfer fees.
• In most situations, cash advances aren’t worth it because of high fees and APRs, as well as interest immediately accruing with no grace periods.

What is a balance transfer?

A balance transfer moves debt from one credit product to another, typically between two credit cards. The primary reason you might do a credit card balance transfer is to get a lower interest rate on the debt you owe.

For example, you could have a $5,000 balance on a credit card with an 18% annual percentage rate (APR). If you transfer that balance to another credit card with a 0% introductory APR period for balance transfers, you wouldn’t have to pay any interest on the transferred balance for a certain period.

However, you typically have to pay a balance transfer fee for any balance transfer you make, which ranges from 3% to 5% of the transaction. So it makes sense to calculate how much you could save on interest charges from doing a balance transfer versus how much you have to pay in fees.

Pros and cons of balance transfers

A balance transfer could be useful if it helps you get out of debt or pay down existing debt faster. This might be possible if you lower your overall credit card APR by using a balance transfer card with a 0% intro APR offer.

You could also transfer multiple balances to one credit card so all your debt is in one place. This type of debt-consolidation strategy could make organizing and tracking your debt easier.

But a balance transfer isn’t necessarily a free pass to get out of debt. You typically have to pay a balance transfer fee, and 0% intro APR periods don’t last forever. Calculate if you can pay your debt off before the promotional period ends and if paying a fee makes sense in the first place.

Keep in mind you can only transfer a balance to your new credit card up to its credit limit. If your balance transfer card has a $10,000 limit, you can only transfer up to $10,000 to that card, which might be less than the entire balance you want to transfer. Balance transfer fees are often rolled into the balance transfer, so you would have to account for that as well.

A balance transfer could also hurt your credit score in a couple of ways:

• Opening a new credit card typically requires a hard inquiry, which is reported to credit bureaus and shows up on your credit report. This can have a small, negative impact on your credit score.
• A new credit card account can negatively impact the average age of your credit accounts, which is a factor that affects your credit score.

A balance transfer might affect your credit utilization as well. Your credit utilization is how much credit you’re using of your available credit. You typically want to stay below 30% credit utilization so your credit score isn’t impacted.

A balance transfer could reduce the credit utilization on one or multiple credit cards that you transfer balances away from. But your balance transfer credit card could have increased credit utilization if it has a high balance.

Who should get a balance transfer?

A balance transfer generally only makes sense if it’s going to save you money. And a balance transfer will only save you money if:

• You qualify for a balance transfer credit card that provides a lower APR than the existing card.
• The amount you can save on interest is more than what you have to pay in balance transfer fees.

Many of the best balance transfer cards require a good or excellent credit score, which is at least a 670 on the FICO scoring model. Other factors also affect your eligibility, but you likely wouldn’t qualify for one of these cards with a bad credit score or no credit history.

If you think you might qualify for a balance transfer credit card, it’s time to determine whether a balance transfer makes sense mathematically.

Let’s say you have a $10,000 balance on a credit card with an 18% APR. You don’t have an annual fee and you pay $300 per month toward your balance. You want to transfer this balance to a $0-annual-fee balance transfer card with a 0% intro APR offer for 18 months and a 3% balance transfer fee.

In this example, you would pay a $300 balance transfer fee, but also save $2,634 in interest by using a balance transfer credit card. You would also shave 10 months off your payoff schedule.

If you didn’t want to pay any interest at all, you would have to increase your monthly payment by enough to pay off your debt before the introductory period ends.

What is a cash advance?

A cash advance is a way to borrow cash against your credit card’s line of credit. In other words, it’s a way to use your credit card to get cash. For example, taking out a cash advance of $100 would add $100 to your credit card balance.

A cash advance could come in handy if you need actual cash for something, typically for an emergency. That could include emergency car repairs where you have to pay in cash or a similar situation.

You would usually only do a cash advance in an emergency where you have no other options because cash advances can get expensive for multiple reasons:

• There’s often a cash advance fee you have to pay.
• Cash advances tend to have higher APRs than your typical credit card APRs.
• Interest can start accruing immediately on a cash advance if there’s no grace period.

The method(s) for taking out a cash advance vary by lender but often include going to an in-person branch, using an ATM (like how you use a debit card to withdraw cash), or writing a check.

Cash advance pros and cons

Who should get a cash advance?

Most people shouldn’t get a cash advance because of the fees and high interest rates. And you might have alternative strategies you can use.

Of course, you might find yourself in a situation where you don’t have a sufficient amount of cash on hand and no other means to get more money quickly. In an emergency, a cash advance might be worth it. But you should try to pay it off as quickly as possible to avoid interest.

And to give yourself more options, you could start preparing right now to help minimize that type of situation from ever happening. For example, building an emergency fund is an excellent way to give yourself some breathing room in case of unexpected circumstances. This could give you an easily-accessible source of funds to pull from if you ever need it.

So instead of using a cash advance as a payment method, it’s generally best to make a payment from a bank account. That way, you pay from a checking or savings account, likely without having to worry about any fees.

FAQs

Bottom line

You can’t typically pay a credit card directly with another credit card. But two indirect methods include doing a balance transfer or taking out a cash advance. Keep in mind that both of these strategies often incur fees, so you have to calculate whether it would be worth paying the fees.

In most cases, we recommend doing a balance transfer over cash advance, especially if you have a balance transfer credit card with a 0% intro APR offer. Note that you would still need to calculate whether it would be worth paying a balance transfer fee depending on your specific situation and personal finance goals.

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