Can you pay a credit card with a credit card?

Your credit card payment is fast approaching. And this month? You’re freaking out. The problem isn’t just that you’re struggling to pay the total balance — it’s that you can’t even afford to make the minimum required payment.

We all have our own reasons for using a credit card. When we use them responsibly, they do offer benefits, such as helping us establish credit, cover the expenses of emergencies, rack up frequent flyer miles, or earn cashback. However, chances are that on at least one occasion, you’ve swiped your credit card because you couldn’t afford what you were buying at the time.

Sometimes when people don’t have the money to make a purchase, they put it on their cards and deal with it later. So if you don’t have the cash to make a credit card payment, wouldn’t it make sense to pay with another credit card?

Is that even an option? Can you pay a credit card with a credit card?

Well, yes and no.

Most credit card companies will not allow you to pay one credit card with another. At least not directly. It’s simply too expensive for them to process these transactions. They typically require you to pay directly from your checking account.

There are a couple of indirect ways you can pay one credit card with a second card, though. Even better, there are some long-term solutions that don’t involve a second credit card and can prevent this same problem from arising when it’s time to make another payment next month.

Indirect ways to pay a credit card with another credit card

Taking a cash advance

You can’t pay a credit card with a credit card directly, but you might be able to pay a credit card with cash from another 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.

In this case, you’d insert Card B into an ATM and withdraw cash from your account. This is known as taking a cash advance. Then, you’d deposit that money into your checking account and make an online payment from your bank account or with a debit card.

The pros of a cash advance

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 to use for this transaction, and Card B has a lower interest rate than Card A.

Completing a balance transfer, which is the second option we’ll cover below, involves applying for a brand new credit card. Taking a cash advance is the better option if you already have a second credit card.

Why is taking a cash advance ideal for making a small payment? Most credit card companies place limits on how much cash you can withdraw with your credit card per month.

If your withdrawal limit from Card B is $5,000 and you only want to make a payment of $500 on Card A, things shouldn’t get too sticky.

Also, the money you withdraw accrues interest. If Card B has a lower interest rate than Card A, then you could save money using Card B to pay off Card A, and then making more manageable payments on Card B.

The cons of a cash advance

It doesn’t make much sense to take a cash advance to make a huge payment. First, your credit card company might not allow you to withdraw enough money per month to make that payment.

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 for Card B to inquire about your cash advance limit.

Second, interest usually starts accruing on the amount you withdraw from the moment you take the cash advance. This could make it easy to go even further into debt.

Also, you’ll likely pay a fee to take a cash advance. The amount will vary depending on the credit card company, but you can usually expect to pay around $10 or 5% of the amount you withdraw.

Furthermore, it’s important to note that the annual percentage rate (APR) for a cash advance will typically be higher than the purchasing APR on the card, so you’ll want to check on that as well.

Completing a balance transfer

With a balance transfer, you’ll transfer the balance on Card A to Card B, which ideally would have a lower interest rate or even none at all. You could potentially pay off your total balance more quickly because interest isn’t building on the original amount you owe.

In the case of a balance transfer, you’d transfer the amount to a designated balance transfer credit card.

The pros of completing a balance transfer

Certain credit card companies offer balance transfer credit cards with no interest rates for the first six months or more. When you shop around for a new card, you’ll typically hear this grace period referred to as an “introductory balance transfer APR period” or “promotional period.”

Balance transfers do have some perks over cash advances. When you take a cash advance, the money you withdraw automatically starts accruing interest, meaning you could owe more in the long run if you aren’t careful.

When you transfer the money you owe to a balance transfer card, the low-interest rate could mean you end up paying less; as a result, you might be able to pay off your debt more quickly.

The cons of completing a balance transfer

Yes, balance transfers may be godsends for paying off your total balance in a shorter amount of time. What if you can’t pay off the total balance quickly, though? Once the introductory balance transfer APR period ends, the interest rate will shoot up, and the balance transfer card won’t seem so magical anymore.

If you miss a payment, most companies will suspend the introductory APR period on 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 Card A. Even if you consider yourself responsible enough to make all your payments on time, an unexpected financial emergency could throw you off track.

There are also generally fees associated with balance transfers. Granted, they’re often lower than cash advance fees. As you can see, indirect methods of paying a credit card with another card have the potential to become slippery slopes.

Before you rush to the ATM to take a cash advance or apply for a balance transfer credit card, you may want to explore other strategies for making this month’s credit card payment.

Taking out a personal loan

If you’re wondering, “Can I pay one credit card with another?” you may be asking the wrong question. The right question might be, “What’s a better way to pay off my credit card?” The potential answer: taking out a personal loan.

Yes, the word loan is a little scary. If you find yourself in over your head with credit card payments, though, a personal loan could be your best friend.

In this situation, you’d take out a personal loan from a lender and use the loan money to make credit card payments.

The pros of taking out a personal loan

In America, many credit cards come with variable interest rates, meaning the rate can change over time. These rates often change along with the economy.

A big pro with taking out a personal loan is that lenders can issue fixed rates, so you’re unlikely to face any surprises. If you have a good credit score, your personal loan fixed interest rate could potentially be lower than your credit card rate.

If this is the case, you can take out a personal loan to pay off your credit card, then make payments on that personal loan at a lower interest rate. As a result, you’d likely end up paying less in interest over time and might even be able to pay back the loan more quickly than you’d be able to pay off the credit card.

Taking out a personal loan could help improve your credit score in more ways than one. One factor that affects your credit score is your credit utilization, which is the relationship between your credit limit and the balance you are carrying against that credit.

For example, if your credit card spending limit is $10,000, it’s generally better to owe $1,500 on your credit card than $8,000. If you consolidate the credit card debt with your personal loan, your credit utilization ratio will go down, which could improve your credit score.

Your credit score may also improve as you consistently pay bills on time. If you use a personal loan to pay off your credit card, it could help increase your score. And the more monthly payments you make on time, the more likely your credit score is to increase — credit bureaus love responsible payment behavior.

A mix of credit accounts can also improve your credit score. If you have multiple credit types, such as a credit card, mortgage and personal loan, it potentially bodes well for your credit score.

The cons of taking out a personal loan

Taking out a personal loan to pay off a card isn’t for everyone. Maybe you’ve realized 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 and trap you in a vicious cycle.

The likelihood that your personal loan interest rate would be lower than your credit card annual percentage rate (APR) is pretty good. The average APR on credit cards is 22.84%, and unless your credit score falls to the lower end of average (640-679), there’s a good chance a personal loan will offer a lower rate.

However, a lower rate isn’t guaranteed. If you discover your loan rate could be higher than your card’s rate after talking with a lender, taking out a loan may not be the best choice.

No matter how low your personal loan interest rate, it will still be higher than the rate during an introductory APR period for a balance transfer. Although taking out a personal loan has several benefits over completing a balance transfer, the initial interest rate isn’t one of them.

Taking control of your credit card debt

Sure, paying a credit card with another credit card indirectly may be a short-term solution. However, taking out a fixed-rate personal loan with a clearly defined payment schedule may be the better long-term option.

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