AreÂ Credit Card to Credit Card Payments Possible and a Good Idea?
Paying the balance on one of your credit cards with another credit card is possible. But when you make aÂ credit card to credit card payment, you’re not reducingÂ debtâ you’re simply moving it from oneÂ account to another. Whether or not this is a good idea depends on factors such as interest rates, your overall credit andÂ debt situation and whether you have a plan or are scrambling to keep up with payments.
How Can IÂ Pay My Credit Card Bill with Another Credit Card?
Typically, you can’t simplyÂ pay your credit card bill with another card as if you wereÂ paying your utility or phone bill.Â Credit card companies don’t usuallyÂ accept credit cards as a regular form of payment, in part because it opens the door forÂ debt to revolve through your accounts in an infinite loop. But that doesn’t mean you can’t use one credit card resource toÂ pay off or make payment on another’s balance.Â Cash advances andÂ balance transfer offers are two ways you can make this happen.
How Do YouÂ Pay a Credit Card with aÂ Cash Advance?
AÂ cash advance involves usingÂ your credit card to take out money from an ATM or at the teller window at your bank. You mayÂ pay a fee for this, and you’re usually limited to the amount you can advance yourself during each day, statement cycle or withdrawal attempt. That makes it difficult to get enoughÂ cash toÂ pay off a large balance, but you might be able to take out enough to make yourÂ minimum payment every month.
Once you get theÂ cash, you have to convert it into a format that lets youÂ pay your credit card bill. You can deposit it into yourÂ checking account or buy a money order to mail toÂ your credit card company.
Remember that you haven’t cleared theÂ debt, though. It’s now on a different credit card. And since some cardsÂ charge a higher APR forÂ cash advances, you might have increased the cost of yourÂ debt.
UsingÂ cash advances in this manner isn’t an ideal situation and can be an indication that your personal financesÂ need some work. But if you’re dealing with a short-term financial emergency and just want to avoid having a lateÂ credit card paymentÂ hurt your interest rate orÂ credit score, this may be a better option than turning to payday loans.
Can You Transfer Money from a Credit Card to Another Credit Card?
Yes, if you have a credit card that allows balance transfers, you can move all or part of a balance from another card to it. You must keep the transfer belowÂ yourÂ credit limit, though. If you have a card with aÂ credit limit of $3,000, for example, you can only transfer up to that amount.
Balance transfersÂ are typically a better method forÂ credit card to credit card payment thanÂ cash advances are. This is especially true if you have a new card with aÂ lowÂ introductory APR offer. If the new card has 0% APR on balance transfers for up to 18 months, for example, you can transfer an existing balance andÂ pay it off in that time withoutÂ paying more in interest.
Consider the scenario below to understand the benefits of balance transfers. They can help you get a handle on yourÂ debt andÂ pay it off faster if you’re responsible in the way you manage them.
- You owe $3,000 at 21% interest on a card.
- You have aÂ balance transfer card with a 0% APR for 18 months.
- You can transfer the $3,000 to that card, make payments of $167 each month on it andÂ pay it off withoutÂ paying more interest. You may need toÂ pay aÂ balance transfer fee, which could be 1 to 5%. So, $30 to $150 in this case.
- Compare that cost withÂ paying on the balance for 18 months at 21% interest. You would need toÂ pay$196 a month andÂ pay a total of $522 in interest.
- TheÂ balance transfer saves you more than $350 as long as you doÂ payoff the balance and don’t use the old credit card to run up moreÂ debt.
Many people successfully useÂ balance transfer cards as a stand-in for otherÂ credit card debt consolidations. But if you can’t get a card big enough or want to clear the slate and have a single payment instead of multiple credit cards to deal with, you might consider aÂ personal loanÂ toÂ pay off your balances.
When Should IÂ Pay MyÂ Credit Card Balance?
You should make at least theÂ minimum payment every month before the statement due date to avoid negative impacts to yourÂ credit score. You shouldÂ pay off yourÂ credit card balance every statement cycle to avoid interest expenses â unless you have a 0% APR offer. In that case, you shouldÂ pay the balance off before the end of theÂ introductory period to avoid expensive interest that can, in some cases, be back dated to the origination of theÂ debt.
Can YouÂ Pay a Credit Card with a Credit Card to Get Points?
BecauseÂ cash advances and balance transfers are not eligible for points inÂ credit card rewards systems, you can’t earn miles or points byÂ paying off your other credit cards. You can, however, earn points with many rewards cards byÂ paying other bills, such as your mortgage or utility bill.
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