If you’re in a bind to make a credit card payment, you may wonder if you can use another card to make your minimum payment. Typically, that’s not possible, or at least you can’t make the payment directly.
There may be workarounds that allow you to pull it off indirectly, such as cash advances and balance transfers.
Here, learn the details on these options, as well as some alternatives to help out when you are short on cash and have a credit card payment due.
Avoiding the Issue in the First Place
The best way to avoid a situation in which you are considering using one credit card to pay another is by paying your entire credit card statement balance every month.
Making credit card payments in full and on time will allow you to avoid paying interest.
Paying the statement balance in full each billing cycle also reduces the chance of accumulating debt that is hard to pay off.
At the very least it is important to make minimum payments to avoid negative effects on your credit score.
Of course, many people face situations in which it becomes hard to pay bills on time. Finding a budget system that works for you is one way to manage; there are many different budgeting methods out there, and it’s like one or more will suit you.
You might also consider doing some of your spending with a debit card or cash to avoid carrying so much credit card debt.
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Paying a Credit Card With Another Credit Card
Curious to know, “Can I use a credit card to pay off another credit card?” Most credit card rules don’t allow you to directly pay one card with another. It’s considered too expensive to process these kinds of transactions. But that said, there may be some workarounds that could allow you to use one card to pay another.
Taking a Cash Advance
You can’t pay one credit card with another directly, but you might be able to pay a credit card with a cash advance from another credit card.
Let’s say you have two credit cards: Card A and Card B. You can’t afford to make your minimum payment on Card A, so you’re looking to Card B for a little help. You have the option to take a cash advance from Card B.
You could use Card B to withdraw cash at an ATM. Then you’d deposit that money into your checking account and make an online payment from your bank account or with a debit card.
Pros of a Cash Advance
The pros of using a cash advance to pay another credit card aren’t numerous. Basically, you are just accessing cash when it’s urgently needed.
• Taking out a cash advance may be the right option if your situation meets three criteria: You’re trying to pay a small amount on Card A, you already have a second credit card (Card B) to use for this transaction, and Card B has a lower interest rate than Card A.
• Most credit card companies limit how much cash you can withdraw with your credit card per month. If your withdrawal limit from Card B is $5,000, though, and you want to make a payment of $500 on Card A, things shouldn’t get too sticky.
In this way, you can make a payment, whether the minimum or more, to the credit card that is due. By using this process, the answer to “Can I pay a credit card with a credit card?” can be yes.
Cons of a Cash Advance
While a cash advance may get the money you need into your hands, consider the cons:
• Your credit card company might not allow you to withdraw enough money per month to pay off your other credit card. Your cash advance limit isn’t necessarily the same as your monthly spending limit. Before you take a cash advance, you may want to contact the company that issued your second card to inquire. Or check a statement.
• Also, interest usually starts accruing on the amount you withdraw from the moment you take the cash advance. The annual percentage rate (APR) for a cash advance will typically be higher than the purchasing APR on the card. As a result, it’s possible to go even further into debt.
• What’s more, you’ll likely pay a fee to take a cash advance. The amount will depend on the credit card company, but you can usually expect to pay the greater of $10 or 5% of the amount you withdraw.
Completing a Balance Transfer
If you don’t have another credit card, or your cash advance allowance is too low, you might consider a balance transfer, which would allow you to transfer the balance on Card A to Card B.
Ideally, Card B would have a lower interest rate or none at all. You could potentially pay off the total balance more quickly because more of the money you used to pay in interest is going to pay off the principal, or you’re not accruing interest at all.
You may complete a balance transfer only by using a designated balance transfer credit card.
Pros of a Balance Transfer
The benefit of a balance transfer is getting a reprieve on paying the high interest rates that credit cards can charge.
• Certain credit card companies offer balance transfer credit cards with no interest for the first six months or more. When you shop around for a new card, you’ll typically hear the grace period referred to as an “introductory balance transfer APR period” or “promotional period.”
• During this period, you can work on paying off your debt without paying any interest. This can help you manage your finances and debt better.
Cons of a Balance Transfer
While balance transfers may be a godsend for paying off your balance in a set amount of time, what if you can’t nibble away at the total balance quickly? Keep these drawbacks in mind:
• Once the introductory balance transfer APR period ends, the interest rate will shoot up, and the balance transfer card may not seem so magical anymore.
• If you miss a payment, most companies will suspend the introductory APR period on your new card, or Card B, and you’ll have to pay what’s known as a default rate, which could end up being even higher than the rate on your previous Card A. Even if you consider yourself responsible enough to make all your payments on time, a financial emergency could throw you off track.
• There are also generally fees associated with balance transfers, though they’re often lower than cash advance fees.
• It’s worth mentioning that you usually can’t use balance transfers or cash advances to get credit card points or miles.
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What If I Can’t Pay My Minimum?
Now you have some answers to why you can’t pay a credit card with a credit card directly. And you know the ways to get around that situation and still use plastic.
If, for whatever reason, a cash advance or balance transfer isn’t available to you, you may still have trouble making your minimum payments. If this is the case, stay calm, and assess your situation. Here are some options for a credit card debt elimination plan.
• You may want to gather your credit card statements and put your debts in order, either from largest to smallest or from highest interest rate to lowest. This step can help you understand how much debt you’re in and how to prioritize your bills.
• You may decide to tackle the largest debts first or even your smallest to gain momentum. Or you may decide to save money on interest by focusing on credit cards with the highest interest rate first. You may see these tactics referred to by such names as the debt avalanche or snowball repayment methods.
• You may consider talking to your creditors to see if they can help. A credit hardship program could give you more time to pay off your balance or adjust your terms.
What About a Personal Loan?
Taking out a personal loan is an option for paying off a large credit card bill. A personal loan may come with a lower interest rate than a credit card, and may be more manageable in the long run.
Pros of a Personal Loan
Here are some of the pluses of using a personal loan to pay off credit card debt:
• If you have a good credit score, your rate for a personal loan could potentially be lower than your credit card rate. If that is the case, you could take out a kind of personal loan called a credit card consolidation loan, and then make payments on the loan at the lower interest rate. You’d likely end up paying less in interest over time and might be able to pay back the loan more quickly than you’d be able to pay off the credit card.
• Most credit cards come with variable interest rates, meaning the rate can change over time with shifts in the economy. An unsecured personal loan usually has a fixed rate. (Unsecured means the loan isn’t secured by collateral, like your home or car.) This can help you budget better, since you know what you owe every month.
• Taking out a personal loan also could help your credit utilization ratio, the amount of available revolving credit you’re using. Credit utilization affects your credit score. You can build your credit score by lowering your credit utilization ratio. Your score can also be favorably affected when you consistently pay bills on time.
Cons of a Personal Loan
Taking out a personal loan to pay off a credit card isn’t for everyone. Here are some downsides to think over.
• It might not help you take control of your finances. Maybe you have trouble controlling your spending, and that’s why you have credit card debt to begin with. Having a personal loan to fall back on could tempt you to spend even more with your credit card.
• Also, a lower interest rate isn’t guaranteed. If you discover that your loan rate could be higher than your card’s rate after inquiring with a lender, taking out a loan may not be the best choice.
• No matter how low your personal loan interest rate is, it will still be higher than the rate during an introductory APR period for a balance transfer.
The Takeaway
Can you pay a credit card with a credit card? Indirectly, yes, with a balance transfer or cash advance. While those moves can work in a pinch, each has potential drawbacks.
Taking out a fixed-rate personal loan with a clearly defined payment schedule may be the better long-term option.
Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. Checking your rate takes just a minute.
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