Credit card debt cycle! Can you pay a credit card with a credit card? If yes, how does it work? Read on to find out.
Paying a credit card with a credit card is not an ideal way to get rid of credit card debt. But, it is possible!
Generally, most credit companies do not allow you to make monthly payments. This might make using a credit card to clear your credit debt quite hard. However, you can use balance transfer or cash advance methods to pay your credit card with another card.
Using a credit card to pay another is only encouraged in case you want to take advantage of lower interest rates in the new credit card. It is also a good way to consolidate your debt from different credit cards.
So, to answer the question – can you pay a credit card with a credit card? The answer is yes. But how? And is it the best move?
Let’s find out…
Table of Contents
Methods of Paying a Credit Card with Another Card
1. Cash Advance
When using this method to pay a credit card, you are simply taking a cash advance from the other credit card. This happens the same way you withdraw money from an ATM.
With a cash advance, you will pay interest rates and other associated fees. So, this is one of the most expensive ways to use a credit card to pay another.
The interest rates start accumulating immediately you get the cash advance and might get overwhelming. And for this reason, using this method is highly discouraged.
2. Balance Transfers
As the name suggests, with this method, you transfer the balance of one credit card to another. This method is ideal for consolidating debt from different credit cards.
Using balance transfers is also a good way to take advantage of the low-interest rates offered by some credit cards. However, using balance transfers is not all rosy as there are transfer costs involved. Some credit card companies will charge you as high as 5% of the total amount to transfer.
Can you Pay a Credit Card with a Credit Card? Advantages
1. Take Advantage of Low-interest Rates
If the credit card that you currently have attracts high-interest rates, you can ditch it. You can transfer the balance to a new credit card that has low-interest rates.
In the process, you’ll have paid one credit card’s debt with another card. This will help you escape the high-interest rates and switch to something a little bit manageable.
2. Consolidate Debt into One Credit Card
Consolidating debt is one of the reasons why people use one credit card to pay another. If you have debts from different cards, you can transfer the balance to one credit card. Dealing with one payment might feel less stressful and overwhelming.
Disadvantages of Paying a Credit Card with a Credit Card?
High Fees
Using a credit card to pay for another one can be expensive. You have to deal with fees that come with transferring money from one credit card to another.
Sometimes the fees can be as high as 5% of the total amount that you want to transfer.
Can I Pay a Credit Card with a Credit Card?
This method is not ideal for everyone. Some people feel that paying a credit card with another card is not ideal due to the high fees.
However, if you decide to go on with it, here are some tips that you need to keep in mind:
1. Stop Using the First Credit Card
Once you use a credit card to pay another credit card, you will need to exercise some discipline. That means that you should avoid using a credit card that has zero balance.
The idea is to practice some financial discipline until you finish paying the high credit balance. If you do not do this, you will fall back into the vicious debt cycle again.
2. Make the Payments
If you have done a balance transfer and now you have all the debt in one credit card, it is time to keep your promise. Make sure that you keep up with the payments.
Paying one credit card might look like a relief, but you still need to do it so that you do not get penalties and high charges. This will also be quite helpful to your credit score.
3. Change your Spending Habits
Using a credit card to pay a credit card is already a risky situation. You need to change your spending habits so that you do not find yourself in a mess again.
The best way to avoid the situation from happening to you again is to ensure that you become more financially disciplined.
See related: Can you Buy Money Order with Credit Card?
Alternative Ways to Pay Credit Card Debt
If you are contemplating using a credit card to pay a credit card, there are chances that you are in credit card debt. This should not be a big worry because you can solve the problem with the right commitment.
Using your credit card is just one of the ways to do it. But, there are other ways to pay credit card debt. These include:
1. Getting a Cheaper Loan
You can get a loan to pay your credit card debt. The catch is to make sure that you get a cheaper loan than the credit card interest rates.
If you can get a personal loan that you can pay over the next few months, then you will manage to pay the loan. Dealing with credit card debt can be overwhelming, and you might need to take a break from the burden.
2. Squeeze your Budget
Cutting down your expenses can be challenging, but it is doable.
For instance, you can squeeze your budget by avoiding some luxuries such as takeaway coffee or going to the movies every Friday.
Getting rid of these luxuries for some time can help you to channel that money elsewhere, including paying your credit card debt.
3. Always Make your Payments on Time
Once you start managing debt, the secret is always to make payments. Skipping payments is a recipe for disaster, and it will end up taking you back to the debt cycle. Never skip payments and make sure that you make them on time.
Paying credit card debt is possible. Even if you are at that point where you need to use a credit card to pay for another credit card, you can still deal with it. But, the first step is to get real on how much you owe.
Once you are true to yourself, you will come up with a plan that will help you start handling your debt. Unfortunately, many people choose to ignore the debt instead of starting payments. In the end, it becomes unmanageable.
So, can you pay a credit card with a credit card? Absolutely! But it’s certainly not the best move if you’ll not make prompt payments.