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Are Credit Card to Credit Card Payments Possible and a Good Idea?

Paying the balance on one of your credit cards with another credit card is possible. But when you make a credit card to credit card payment, you’re not reducing debt— you’re simply moving it from one account to another. Whether or not this is a good idea depends on factors such as interest rates, your overall credit and debt situation and whether you have a plan or are scrambling to keep up with payments.

How Can I Pay My Credit Card Bill with Another Credit Card?

Typically, you can’t simply pay your credit card bill with another card as if you were paying your utility or phone bill. Credit card companies don’t usually accept credit cards as a regular form of payment, in part because it opens the door for debt to revolve through your accounts in an infinite loop. But that doesn’t mean you can’t use one credit card resource to pay off or make payment on another’s balance. Cash advances and balance transfer offers are two ways you can make this happen.

How Do You Pay a Credit Card with a Cash Advance?

A cash advance involves using your credit card to take out money from an ATM or at the teller window at your bank. You may pay a fee for this, and you’re usually limited to the amount you can advance yourself during each day, statement cycle or withdrawal attempt. That makes it difficult to get enough cash to pay off a large balance, but you might be able to take out enough to make your minimum payment every month.

Once you get the cash, you have to convert it into a format that lets you pay your credit card bill. You can deposit it into your checking account or buy a money order to mail to your credit card company.

Remember that you haven’t cleared the debt, though. It’s now on a different credit card. And since some cards charge a higher APR for cash advances, you might have increased the cost of your debt.

Using cash advances in this manner isn’t an ideal situation and can be an indication that your personal finances need some work. But if you’re dealing with a short-term financial emergency and just want to avoid having a late credit card payment hurt your interest rate or credit score, this may be a better option than turning to payday loans.

Can You Transfer Money from a Credit Card to Another Credit Card?

Yes, if you have a credit card that allows balance transfers, you can move all or part of a balance from another card to it. You must keep the transfer below your credit limit, though. If you have a card with a credit limit of $3,000, for example, you can only transfer up to that amount.

Balance transfers are typically a better method for credit card to credit card payment than cash advances are. This is especially true if you have a new card with a low introductory APR offer. If the new card has 0% APR on balance transfers for up to 18 months, for example, you can transfer an existing balance and pay it off in that time without paying more in interest.

Consider the scenario below to understand the benefits of balance transfers. They can help you get a handle on your debt and pay it off faster if you’re responsible in the way you manage them.

  • You owe $3,000 at 21% interest on a card.
  • You have a balance transfer card with a 0% APR for 18 months.
  • You can transfer the $3,000 to that card, make payments of $167 each month on it and pay it off without paying more interest. You may need to pay a balance transfer fee, which could be 1 to 5%. So, $30 to $150 in this case.
  • Compare that cost with paying on the balance for 18 months at 21% interest. You would need to pay$196 a month and pay a total of $522 in interest.
  • The balance transfer saves you more than $350 as long as you do payoff the balance and don’t use the old credit card to run up more debt.

Many people successfully use balance transfer cards as a stand-in for other credit card debt consolidations. But if you can’t get a card big enough or want to clear the slate and have a single payment instead of multiple credit cards to deal with, you might consider a personal loan to pay off your balances.

When Should I Pay My Credit Card Balance?

You should make at least the minimum payment every month before the statement due date to avoid negative impacts to your credit score. You should pay off your credit card balance every statement cycle to avoid interest expenses — unless you have a 0% APR offer. In that case, you should pay the balance off before the end of the introductory period to avoid expensive interest that can, in some cases, be back dated to the origination of the debt.

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

Because cash advances and balance transfers are not eligible for points in credit card rewards systems, you can’t earn miles or points by paying off your other credit cards. You can, however, earn points with many rewards cards by paying other bills, such as your mortgage or utility bill.

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  • Tom Davies

    Hi, would you not need to add money to your Amex Serve Card first? If you were using a credit card to fund this wouldn’t you need to pay the cash rate on the credit card?

    • http://www.credit.com/ Credit.com Credit Experts

      It no longer matters . . . as of April 16, Serve no longer allows card reloads charged to any credit card not issued by American Express (no more Visa, MasterCard or Discover).

  • http://www.credit.com/ Credit.com Credit Experts

    Hi, Pamela. Thanks for asking. We wrote this article in response to your comment. We hope that helps!

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