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Can I Use One Credit Card to Pay Off Another?

Instead, consider a balance transfer, in which you shift the debt to a new card and may save on finance charges.
Jan. 22, 2020
Balance Transfer Credit Cards, Credit Cards
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We all run short on cash from time-to-time. If you’re scrambling to find the money for the minimum payment on your credit card, can you use another card to pay it?

The answer is yes, but there might be a better alternative. Take a look at the details below for more information.

Using a credit card to pay another credit card is possible

Technically, you can use a credit card to pay another credit card, although you probably won’t be able to do this directly. Most issuers won’t allow you to just punch in another credit card number online to make your payment.

But there’s a way around this: You can take a cash advance from one credit card at an ATM, deposit the money into your checking account, then use those funds to pay your other card. Alternatively, you could use the convenience checks sent by your credit card issuer to make a deposit into your checking account and achieve the same effect.

Keep in mind, though, that both of these approaches carry significant costs. Cash advances (taken from an ATM or through the use of a convenience check) typically carry a much higher interest rate than the one you’re paying on purchases. Also, your issuer will charge you a cash-advance fee of 2% to 5% just for tapping the funds. As a result, using these methods to make a credit card payment should be considered a last resort.

Opting for a balance transfer might be best

If you’re carrying so much credit card debt that making minimum payments is a struggle, transferring your balance to a card that’s offering a 0% APR promotion might be a smart idea. If you have excellent credit, there are multiple cards available that offer 12 months or more interest-free. This is a generous amount of time to pay off your debt without incurring finance charges.

If you have excellent credit, there are many cards on the market that offer 12 months or more interest-free.

However, there are some pitfalls to consider before opting for a balance transfer. For one thing, there will probably be a fee involved. Most issuers charge a balance transfer fee of 3% to 5%, which will cut into the overall savings you’ll see from doing the balance transfer in the first place. However, there are a few cards on the market that either don’t charge this fee or waive it under certain conditions.

Also, if you do choose a balance transfer, it’s very important to make your payments on time. Missing even one could cause the issuer to cancel your 0% deal and start charging you interest right away.

Finally, remember that 0% promotions don’t last forever. It’s your responsibility to keep track of when your interest-free period is up; the Nerds recommend making every effort to pay off your balance before the introductory period expires.

» MORE: NerdWallet’s best balance transfer credit cards

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Take a hard look at your finances before moving forward

If you’re considering a cash advance or balance transfer because you’re having a hard time making minimum payments on your credit card, this could indicate a larger financial problem.

Before moving forward with either, it’s wise to step back and take a hard look at your finances. Figuring out the cause of your cash-flow crunch will help prevent it from happening in the future.

If you’re considering a balance transfer because you’re having a hard time making minimum payments, you might have a larger financial problem.

To do so, ask yourself the following questions:

  • Am I overspending? If your credit card minimums are sky-high because you’re overspending every month, it’s time to make a budget. Then, track your spending closely to be sure you’re following it.
  • Am I carrying too much debt? If it’s tough to make credit card payments because you’re drowning in debt, take steps to reduce it. Consider consolidating or refinancing your student loan payments, or trading in your car for a less expensive model.
  • Do I earn enough to cover my costs? If your spending and debt are under control but you’re not earning enough to cover your monthly costs, brainstorm ways to pump up your income. For example, getting a second job or taking on freelance work might be good options.

The bottom line: You can use a credit card to pay another credit card, but that doesn’t mean you should. Consider all alternatives and take a hard look at your finances before making a rash (and potentially expensive) decision.