Get Out of Debt

Can You Pay a Credit Card With a Credit Card?

Article Summary

Generally, credit card companies don’t accept such payments. Luckily, there are a few workarounds, namely balance transfers, cash advances, 0% APR intro offers, and other alternatives. This article will examine each option and provide some alternative ways to pay for your credit card.

No, you typically can’t pay your monthly minimum payment with a credit card. However, there are ways around that if you get a little creative. Needless to say, paying a credit card with a credit card is usually a bad idea. However, we all go through rough financial patches. Sometimes, paying the bills can seem like a struggle that never ends. Even making a minimum payment on your credit card can be difficult. That’s when using one credit card to pay another card’s balance might seem like a good idea.

If you are in a bind, you can use the methods explained below to pay off your credit card with another credit card. Make sure you are aware of the costs involved. And understand there are consequences if you merely move credit card debt around rather than actually paying it off.

Let’s take a deeper look so you can decide if it’s the right path for you.

How can I pay my credit card bill with a credit card?

Using one card to pay another isn’t as simple as it might sound. You can’t just plug your credit card information into the payment details and be done. Instead, you will need to use your card to place funds into your checking, savings, or money market account to make the payment.

Here are a few of the most common ways to pay one credit card with another card.

Ways to pay a credit card bill with another credit card

  1. Cash Advance: Although one of the easier methods of paying off another credit card, it is usually the most expensive option because of the fees issuers charge. It involves you withdrawing money from your credit card at an ATM or bank to pay your debt.
  2. Balance Transfer Option: Balance transfer credit cards can help you clear your debt, allowing you to transfer your existing balance from one card to another. A card with a 0% interest rate can save you a lot of money with balance transfers.
  3. Use alternative lines of credit: Alternative credit cards, such as Upgrade Card, work like a credit card but don’t charge you fees to transfer money from your line of credit to your checking account. Note that these cards are usually paid with regular (and fixed) monthly installments, so they may not be the best option for those already struggling to make minimum payments on a credit card.

Why can’t you pay a credit card with a credit card?

For the most part, paying your card with another credit card isn’t possible because of the fees involved. If credit card companies were to process payments from one another, they’d incur interchange fees. These are charges imposed by card networks — such as Visa, America Express, and MasterCard — and the bank that issues the card. They help incentivize the issuing banks to continue processing cards for customers, covering the risk of credit card fraud. Generally, most merchants pay the fees, but credit card companies don’t.

Another reason why your credit card issuer may not accept a credit card payment is the risk of mounting debt. Using card A to pay for card B or C can trap you in a spiral of ever-increasing debt. In essence, you’re not clearing debt, only transferring it.

That said, there are ways to work around the restriction, which we’ll discuss below.

Cash advances or a convenience check — easy but expensive

One of the easiest ways to use your card to pay another credit card is through a cash advance. You start by withdrawing cash from an ATM using a credit card, deposit that cash into your checking account, and then use those funds to pay your other credit card bill.

This might be one of the easiest solutions, but it’s also one of the most costly.

Cash advances are usually subject to a much higher interest rate than purchases or balance transfers. In addition, most credit cards have a cash advance fee of 5%.

That means the more you take out, the more it will cost.

Cash advances are not subject to the same grace period that purchases are, so you will always owe interest charges, even when you pay your statement balance in full.

As a cash advance, convenience checks offer another way to pay your card balance with a credit card. The chances are you have received convenience checks in the past. These can be used in different ways, but frequently they’re used to pay off a credit card with a higher interest rate.

Can you pay a credit card with a credit card?” Yes, it’s possible, but there are usually better alternatives.

Unfortunately, a convenience check costs as much to use as a cash advance. While both of these options will work in a pinch, they come with high costs and are usually not the best options available.

Balance transfer

One of the best options for paying a credit card with a credit card is to transfer high interest rate credit card debt to a low-interest card. This avoids expensive cash-advance fees and can save you money in interest. Balance transfers work simply: the balance in your existing card is shifted to another one — essentially “paying” the existing card by terminating its balance.

What makes the balance transfer an appealing option, though, is the possibility of minimizing your interest rates. Your card’s interest rate may be significantly lower than your existing credit card’s. And, as you’re probably aware, lower interest rates translate to lower monthly payments.

That said, some balance transfer cards don’t just lower your interest payments — they eliminate them completely.

Many credit cards offer new applicants 0% annual percentage rate (APR) balance transfers that remain interest-free for between six and 21 months. Nearly all of these credit card offers require the payment of a 3 to 5% balance transfer fee, which can be well worth it for an interest-free loan.

To understand how balance transfers can save you money, consider this case:

  • Let’s say you’re to pay 15% APR (annual percentage rate) on a $4000 credit card debt.
  • Your minimum monthly payment is $120. At this rate, clearing the debt would take you about 40 months.
  • Your interest payment may compound to over $1200.
  • You secure a balance transfer card with a 0% APR offer for the first 18 months.
  • You move the $4000 to the new card.
  • You’re able to pay off the entire credit card debt within 18 months with monthly payments of about $220.
  • The downside is that you’ll pay a balance transfer fee ranging from 3% to 5%. So the maximum you can pay in fees is $200, which pales in comparison to the $1200 interest you’d cough up without the transfer.
  • In the long run, a balance transfer card can save you a significant amount, provided you don’t rack up more debt with it.

If you choose to use a balance transfer card, you must understand one important thing: You must make all your payments on time. Missing a payment, even by a couple of days, could wipe away the introductory 0% rate of the balance transfer offer.

Completing a credit card balance transfer is simple. You can follow two approaches:

  • Writing a check — This involves securing a check from your new credit card issuer to erase your old debt.
  • Contacting your card company — Get in touch with your credit card company and ask them to handle the transfer. A simple phone call or email will do. You’ll need to provide information such as your old account number and the debt amount to wipe out.

Initiating a transfer can take weeks from the issuer’s end. You shouldn’t, therefore, neglect your old cards; continue making your payments until you confirm the transfer is complete. Paying off debt is difficult enough without the added sting of late payment fees.

Note, though, that sometimes credit card issuers can only approve a fraction of credit card balances. Your credit score plays a huge role in the credit limit you’ll score, as credit card issuers exhaustively assess your credit history. Also, some companies impose their own maximum transfer credit limit, so ensure you’re aware of the issuers’ policies.

Alternative credit cards (i.e., personal lines of credit with a card)

Alternative credit cards, such as Upgrade, provide the functionality of a credit card with a fixed interest rate and repayment term that feels like an installment loan. The fixed monthly installments may help you pay off your credit card debt faster if you were only making minimum monthly payments. These cards typically don’t charge a cash advance fee, which makes them convenient for paying off bills when you don’t have cash. However, there is usually a minimum withdrawal amount, so this may not be an option if you only want a small amount (e.g., less than $500).

Other ways to pay your credit card bill

If you are struggling to cover your minimum credit card payments, it may be time to take a hard look at your finances and make some difficult choices. Read this article for a step-by-step guide to how to get out of debt. Here’s a quick summary of your main options if consolidating your debt with a balance transfer card is not the right choice for you.

Option 1 – Debt consolidation loans

If you don’t qualify for a 0% APR balance transfer card (or you owe to0 much for it to help), a debt consolidation loan can be a good option. Debt consolidation allows qualified consumers to take out a new loan that pays off their outstanding debt. The lenders below are a good place to start. Use the tool to filter lenders by state and credit score.

Home equity loans for debt consolidation

If you are a homeowner and have some equity, you have other debt consolidation options, such as home equity loans, and mortgage refinancing. SuperMoney’s comparison tools allow you to check what rates you qualify for without hurting your credit score. Mortgage refinancing will usually offer the lowest interest rates, but you have to take into account the origination costs, and typically only make sense if you can qualify for a lower rate than your current mortgage’s interest rate.

Shared equity agreements — the debt-free option

However, if you have a high debt-to-income ratio or your credit is not great, you may struggle to qualify for a mortgage refinance or home equity loan. Shared equity agreements are a good alternative for people who have equity in their homes but don’t want another monthly payment. Shared equity agreements, sometimes known as home equity investments, allow homeowners to cash out on their equity without getting into debt. It works like this. Investors give homeowners a lump sum in exchange for a share in the future value of their homes. When the homes are sold (or when the contract term ends), the investors receive their share from the sale. If the value of the house increases, so does the amount the investor receives. If the house drops in value, the investor also shares in the loss.

Option 2 – Consider a debt settlement

If your financial situation is so bad no amount of budgeting or debt consolidation is going to help, you may benefit from a debt settlement program. A debt settlement is an agreement between borrowers and lenders to make a lump-sum payment instead of the full amount owed. It is one of the most aggressive and effective debt resolution methods available. However, it is not a debt relief method you should take on lightly. Debt settlement will damage your credit score and will probably require you to deal with debt collection agencies.

Option 3 – Bankruptcy

Filing for bankruptcy is not something you should take lightly. However, if you are struggling to make minimum payments, your debt-to-income ratio is higher than 40%, and things are unlikely to change in the next five years, it may be time to consider it. Consult with a bankruptcy attorney to see if it’s a good choice for you.

Credit card kiting: What is it? And is it illegal?

There’s a thin line between paying off credit cards with other cards the right way and doing so illegally. In kiting — a bad approach that sometimes crosses this thin line — you routinely apply for new credit cards to wipe out the debts on other cards without ever paying out any of your own money. Consider this scenario:

  • You’re struggling financially and finding it difficult to meet your minimum monthly payments.
  • You resort to applying for another credit card — we’ll call it card B.
  • You take a cash advance from card B and use the money to pay off card A.
  • The following month, you apply for card C and opt for a cash advance, repeating the cycle with other cards.
  • You end up with a sizeable collection of credit cards, constantly carrying your debts forward to the next month.

Is credit card kiting a crime?

Credit card kiting is not a crime as long as you have the intention to pay your debts. Proving lack of intent is hard, which is why it’s very rare for someone to get charged with fraud for credit card kiting. However, it is possible. If prosecutors can prove you made a false representation and had no intention of repaying the debt, it can be considered fraud. For example, in Eashai vs. Citibank, a bankruptcy court found that Eashai couldn’t discharge his debt with Citibank by filing for bankruptcy because he had no intention to pay off his debt when he engaged in credit card kiting, which make it fraud.

Even though credit card kiting may be an appealing “quick fix” for your financial troubles, it comes with huge risks. These include:

  1. Potential harsh penalties from your banks, given that you’re breaching their conditions of use.
  2. A tarnished payment reputation can wreck your credit score. Acquiring debts may be more difficult in the future.
  3. Snowballing interest leading you to a dangerous pit of mounting debt. Following each issuers’ terms and conditions can be exhausting.
  4. You could be prosecuted for credit card kiting if a prosecutor can prove you had the intent to deceive and no intention to pay the debt.

Do credit card companies offer points for paying a credit card with a credit card?

No, you can’t earn points or miles on cash advances and balance transfers since they’re not eligible in reward systems. The only way to score valuable points with most credit card companies is to use your card to pay other expenses, such as payments on loans, rent, and buying products. Paying credit card bills from other issuers or a big card balance won’t do it.

Even if you were to earn miles, you wouldn’t gain much. As mentioned earlier, initiating a bank transfer can incur fees ranging from 3–5% of the transferred cash. This fee effectively outweighs the value from the earned points. In an attempt to win more points, you’d be losing more than you gained.

The Bottom Line

There isn’t a direct, fee-free method to pay your monthly credit card with a credit card. However, you can consolidate your credit card debt with a balance transfer, get a cash advance or use a personal line of credit. Consolidating your debt with a loan is another option that can save you money, but you typically need good credit to qualify.

People with chronic financial difficulties who don’t qualify for any other options and can’t increase their income may benefit from other options, such as a debt consolidation, debt settlement, or even bankruptcy. However, you may be surprised by how much money you can raise by following these tips on how to get cash fast in an emergency.