Can You Pay off a Credit Card With Another Credit Card?
Can You Pay off a Credit Card With Another Credit Card?
The short answer is - kind of. You can't pay off a credit card with another credit card directly. Typically, payments to card accounts can only be made from a bank account that belongs to the primary cardholder.
However, using one credit card to pay off another card can be achieved by adding an extra step. It's possible to take cash advance from one credit card and use it to pay the balance on another credit card. Let's see what credit card cash advance is and why using it to pay off other cards is not a great idea.
What's a Credit Card Cash Advance?
A credit card cash advance is an option of some credit cards that allows cardholders to take out cash from their credit card accounts from an ATM or through a bank teller.
A credit card cash advance is an expensive way to borrow money. Cash advances often come with much higher interest rates than regular credit card purchases and other forms of borrowing, such as personal or home equity loans. Cash advances don't have a grace period like regular credit card purchases, which means that interest begins accruing immediately as soon as you withdraw the money.
Finally, cash advances usually come with additional charges, such as a transaction fee or cash advance fee. This fee can be as high as 5% or more, which will add significantly to the cost of borrowing. You will end up paying much more in interest and fees for a credit card cash advance than you would for other forms of credit.
The rivals to credit card cash advances in terms of their high cost and potential for financial harm are predatory payday loans.
If you are already struggling to pay off your credit card balances, a credit card cash advance can make it even harder for you to get out of debt. You may end up in a debt trap where you will pay mostly interest, and the amount you owe will not go down. It's generally a good idea to avoid taking out a credit card cash advance unless it's absolutely necessary and no other options are available. Carefully consider the cost before taking out a cash advance.
Other Ways To Pay Off Credit Card Debt
Consider other options to pay out debt that doesn't involve paying off your credit card with another credit card. Here are some potential ways to pay off credit card debt:
- Create a budget to see where you can cut expenses and free up money to put toward your credit card debt.
- Consider debt consolidation. You may be able to consolidate your credit card balances onto a single card with a lower interest rate, or into a personal loan with a lower interest rate.
- Consider transferring your balance to a new credit card with a 0% introductory APR on balance transfers, and make a plan to pay off your debt before the introductory period ends.
- Negotiate with your credit card company for a lower interest rate or to waive certain fees.
- Work on building up an emergency fund, so you can avoid turning to credit cards in the future if you face unexpected expenses.
Look For Other Ways to Raise Cash Fast
Instead of taking a cash advance, it may be better to find ways to come up with quick cash. Here are some ideas to get quick money:
- Sell some of your unused belongings.
- Offer to do yard work or other odd jobs for people in your community.
- Sign up for gig economy jobs, such as ridesharing or food delivery.
- Work overtime or take on a second job.
Bottom Line
Using a credit card cash advance can be a sign of financial distress. It might be a good idea to seek financial or credit counseling help if you find yourself relying on credit card cash advances to cover basic needs or cover unexpected expenses. They may help develop a plan to pay off your debt and improve your financial situation.