Can You Pay a Credit Card With a Credit Card November 30, 2023

Can You Pay a Credit Card With a Credit Card. Paying a credit card with another credit card is generally not allowed directly. When you try to pay your credit card bill through online banking or other payment methods, using another credit card is typically not an option provided by most credit card issuers. However, there are a few indirect ways to use one credit card to pay another, each with its own considerations:

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Can You Pay a Credit Card With a Credit Card

1. Cash Advance

You might withdraw cash using one credit card (a cash advance) and then use that to pay the other credit card. However, this method can be costly due to:

Cash Advance Fees: These are fees charged for withdrawing cash, often a percentage of the withdrawn amount.
Higher Interest Rates: Cash advances often have higher interest rates than regular purchases.
No Grace Period: Interest starts accruing immediately, without the typical grace period that you get for regular purchases.

2. Balance Transfer

A balance transfer involves moving the debt from one credit card to another. This might be done to take advantage of a lower interest rate on the new card. Be mindful of:

Balance Transfer Fee: Typically, a percentage of the transferred amount.
Promotional Rates: Sometimes, there is a promotional interest rate for a certain period. Ensure to pay off the balance before this period ends to avoid higher interest rates.

3. Money Transfer Services

You might use a money transfer service (like PayPal or Venmo) to send money using a credit card, and then use that money to pay the other credit card. But remember:

Transaction Fees: Using a credit card to send money often involves fees.
Interest Rates: The transaction might be treated as a cash advance, which could involve higher interest rates and fees.

4. Using a Third Party

Some third-party services allow you to pay bills, including credit card bills, using a credit card. These services usually charge fees that might make the transaction expensive.

Important Considerations

Debt Spiral: Using credit to pay credit can lead to a debt spiral if you’re not careful. It’s essentially borrowing from Peter to pay Paul and can lead to an increasing overall debt level.
Credit Score Impact: Carrying high balances or only making minimum payments can negatively impact your credit score.

Final Note

If you find yourself needing to use one credit card to pay another, it might be worthwhile to speak with a financial advisor or a credit counselor. It’s crucial to understand the implications and potential costs involved and to develop a strategy for managing your debt effectively. Always remember to use credit wisely and within your means to avoid financial pitfalls.