Can You Pay A Credit Card Bill With A Credit Card?

Paying off debt is often a top financial priority for many people. With high interest rates and seemingly endless minimum payments, credit card debt can feel like a heavy burden to bear. This leads some people to get creative with repayment methods, like wondering if they can pay a credit card bill with another credit card.

At first glance, this method seems like a quick fix – simply transfer balances and consolidate into one easy payment. However, while it is possible to pay a credit card bill with another credit card, there are a few factors to consider before taking this approach. In this comprehensive guide, we will explore the ins and outs of paying credit card bills with other credit cards, including key benefits, risks, and alternatives.

How Paying Credit Card Bills With Other Credit Cards Works

Technically speaking, you can use one credit card to pay the bill of another. There are two main ways to go about this:

• Credit Card Balance Transfers – With a balance transfer, you move your existing credit card balance from one card over to a new card. Many cards offer promotional 0% APR periods on balance transfers, allowing you to pay down the debt without accruing interest for a set period of time (often 12-18 months).

• Credit Card Cash Advances – A cash advance allows you to withdraw cash from your available credit limit and use the money to pay bills. You can withdraw cash from ATMs, banks, or other lenders. The cash can then be used to pay a credit card bill.

Both options allow you to consolidate multiple credit card balances into one place, making repayment simpler. However, each method comes with pros and cons to weigh.

The Potential Benefits

Using a new credit card to pay off an existing card bill offers a few potential perks:

• Lower interest rates – If you transfer your balance to a card with a lower APR, you will save on interest fees over time. This allows more of your payment to go toward the principal balance.

• 0% intro APR offers – Balance transfer deals with 0% intro APR periods allow you to pay down the transferred balance completely interest-free for 6-18 months on average. This provides significant savings.

• Consolidation – Combining multiple card balances onto one new card simplifies the repayment process with just one bill to pay each month.

• Rewards – Some balance transfer cards and cash advance options allow you to earn rewards like cash back, points, or miles on the amount transferred over.

• Access cash quickly – With a cash advance, you gain quick access to cash that can be used to pay pressing credit card bills faster.

For the right person, these benefits may provide much-needed relief from overwhelming credit card debt.

Key Risks To Keep In Mind

However, there are also considerable cons and risks to be aware of when paying a credit card bill with another credit card, such as:

• High fees – Balance transfers often come with high transfer fees, usually 3-5% of the transferred total. Cash advances typically have fees around 5% or more of the cash withdrawn.

• Accrued interest – While intro 0% APR periods pause interest accrual at first, normal rates kick in after the intro period ends If any balance remains, interest starts accumulating at potentially very high rates

• Cash advance APRs – The APR on cash advances is usually much higher than the regular purchase APR, sometimes over 25%. This means interest costs can add up very quickly.

• No grace period – Cash advances begin accruing interest immediately, with no interest-free grace period. This can lead to surprisingly high interest fees.

• Impact on credit – If not managed carefully, maxing out cards or missing payments can negatively impact your credit scores over time

• Prepayment penalties – Some lenders charge fees for paying off balances early while still within the intro 0% APR period.

• Enticing more spending – Having open access to credit could tempt some people to overspend and dig themselves into deeper debt. Financial discipline is key.

With these important considerations in mind, paying credit card bills with new credit cards may help – but only if used strategically and responsibly. It is not a cure-all solution.

Alternatives To Paying Credit Card Bills With Other Cards

If you are wary of balance transfers or cash advances, some alternatives to consider include:

• Debt consolidation loans – Personal loans with fixed rates and terms can help consolidate card debt into predictable installments. However, credit qualifications are often strict.

• HELOCs – Home equity lines of credit offer revolving access to funds at relatively low rates. This can be used to pay down credit card debt faster.

• 401(k) loans – Borrowing against your 401(k)’s value comes with no credit check, but loans must usually be repaid within 5 years to avoid penalties.

• Credit counseling – Nonprofit credit counseling services can negotiate lower interest rates on your behalf and set up managed payment plans.

• Debt settlement – Debt settlement companies negotiate with creditors to settle accounts for less than you owe. However, this comes with fees and credit score impacts.

• Bankruptcy – Filing for Chapter 7 or Chapter 13 bankruptcy stops collections and discharges qualifying debt, but comes with long-term damage to credit.

• Budgeting and money management – The healthiest option is creating and sticking to a budget that prioritizes credit card payments until the balances reach zero. But this takes serious discipline.

Some options may be better than others depending on your unique financial circumstances. Speaking with a credit counselor can help weigh the pros and cons of each method.

5 Tips For Paying Credit Card Bills With Credit Cards

If you do opt to use balance transfers or cash advances strategically, keep these tips in mind:

1. Calculate the costs – Tally up all fees and projected interest to confirm the strategy provides overall savings in the long run.

2. Watch intro APR expiration dates – Mark your calendar for when normal rates will kick in and plan payoff accordingly.

3. Read the fine print – Scour the terms and disclosures for prepayment policies, change-in-terms clauses, and other key details.

4. Have a payoff plan – Strategize exactly how you will pay the transferred balance during the intro 0% APR period. Automate payments.

5. Close old accounts – Once balances are transferred, close the old credit card accounts to avoid temptation to rack up new charges.

With some careful planning, paying credit card bills with other credit cards can be an effective debt payoff method for some. But proceed with caution – it is not a universally wise idea for everyone.

Answering Key Questions

To recap, here are some answers to frequently asked questions:

Can you pay a credit card with another credit card?

Yes, it is possible to pay a credit card bill with another credit card in two main ways – balance transfers and cash advances. Each option has pros and cons.

Is it a good idea to pay a credit card with another credit card?

It can be smart strategically, if used properly to consolidate debt at a lower rate. But it is risky if not approached cautiously, as you take on more available credit.

What are the risks of paying credit cards with other credit cards?

Risks include high transfer fees, prepayment penalties, double-billing if not closed, increased debt if overspent, and accelerated interest costs over time.

What are some alternatives to paying credit card bills with other cards?

Alternatives include personal loans, 401(k) loans, home equity loans, credit counseling payment plans, debt settlement, bankruptcy, and diligent budgeting.

How can I use balance transfers responsibly and strategically?

Calculate costs, watch expiration dates, read the fine print, have a payoff plan, close old accounts, automate repayments, avoid overspending.

The Bottom Line

At the end of the day, proceed with eyes wide open if opting to pay a credit card bill with another credit card. While this strategy may help accelerate debt repayment in the short term, it also risks leading to deeper debt troubles if not managed very intentionally. Your best bet is to speak with a credit counseling professional to understand all of your payoff options before making a decision. With some careful planning, paying credit cards with credit cards can be reasonable – but only if done responsibly.