How to pay a credit card with another credit card

Have you ever wondered if it is possible to pay a credit card with another credit card? If so, we’re sorry to say no. It’s not possible, at least not that way. Credit card issuers generally do not accept credit cards as a regular payment method..

Instead, it is common for them to request that you make payments using your checking or savings account, with cash or check at a local branch, ATM, by phone or by mail. However, there is a way to pay one credit card with another. If you have a balance on a high-interest credit card, you can do what’s called a balance transfer.

“Balance transfers allow you to take the balance on one card and transfer it to another,” explains Aaron Aggerwal, assistant vice president of credit cards at Navy Federal Credit Union.

There’s a lot Credit cards on the market that offer a 0% introductory APR on balance transfers during a set promotional period. But before trying pay a credit card with another card using this method, there are a few things you should keep in mind. And it is precisely those details that we are going to talk about in this article. But first let’s start with the basics.

Keep reading: How to apply for a credit card (and get approved) in 6 steps

Balance transfer cards: What are they and what options are there on the market?

Generally, doing a balance transfer only makes sense if you’re transferring the debt to a card with a promotional introductory rate or a lower interest rate. So if you decide to apply for a balance transfer card, you may end up with an interest rate as low as 0% for a set period of time.

And if you can pay off your balance within the promotional period, you’ll end up saving money and time by taking interest out of the equation.

However, many of the major balance transfer cards do charge a balance transfer fee, typically 3% to 5%. So, if you’re looking to transfer $10,000, you may have to pay an initial fee of about $300 to $500.

Some options

The good news is that there are cards that don’t charge fees for transfers made shortly after account opening. For example, the Amex EveryDay® credit card from American Express charges $0 for a balance transfer. Balance transfers must be requested within the first 60 days of account opening. For balance transfers made in the first 60 days, you’ll earn a 0% introductory balance transfer APR that lasts for the first 15 months. After this period, the variable APR for balance transfers is 12.99% to 23.99%.

Chase Slate® is another great option for a balance transfer card. The card offers a 0% balance transfer APR for the first 15 months; after that, the variable annual percentage rate is from 14.99% to 23.74%.

If you do the balance transfer within the first 60 days of account opening, there is a $0 introductory balance transfer fee. Transfers you make after the first 60 days have a balance transfer fee of 5% or a minimum of $ 5.

A third balance transfer card to consider is the BankAmericard® credit card. This card comes with a 3% balance transfer fee ($10 minimum).

However, balance transfer cards are not always the best option for paying off a credit card.

There are a few reasons why you should think twice about applying for a balance transfer card. The first is that there is no guarantee that you will get a credit limit high enough to transfer the balance in full.

And even if you get a high credit limit, most cards have limits on balance transfers that can be less than your available credit. Also, most issuers will not allow you to transfer balances from cards you already have with them.. In this order of ideas, your credit limit is generally determined based on certain credit factors, including the following:

  • Income
  • credit scores
  • Payment history
  • Credit Utilization
  • housing costs

Secondly, applying for a balance transfer card could hurt your credit scores because of the hard credit inquiry that comes with it. For example, every time you apply for a new credit card, you’re likely to get a “hard” inquiry on your credit reports, which will lower your scores immediately, but usually only for a short period of time.

And while the query can stay on your reports for up to two years, it likely won’t affect your scores during that time period. Additionally, if you end up closing the card you transferred the balance from, your scores could go down, as this will affect your credit utilization and the length of your credit history.

Lastly, you may not get approved for a balance transfer card if your credit scores are too low. Therefore, before applying for a card, check your credit reports.

How do I know that I have chosen the correct balance transfer?

Michael Micheletti, director of corporate communications for Tempe, Arizona-based Freedom Debt Relief, says consumers should always look for a balance transfer option that provides the most months to pay off their debt before the interest rate ends. promotional.

According to Micheletti, transfer a balance to a credit card that vests 18 months before the 0% offer expires is a more convenient move than moving the balance to a card that vests just six months before the new interest rate takes effect.

Consumers should also review their entire debt situation. A balance transfer will be of little help if you owe thousands of dollars on multiple credit cards and personal loans. In this sense, Micheletti states that credit counseling and loans from consolidation of debt could be a better measure for consumers whose debt challenges are so severe.

“Don’t look at credit card debt out of context,” says Micheletti. “Consider a balance transfer in relation to all other debt loads you have.”

So, when is a balance transfer worth it?

In this order of ideas, Micheletti believes that a balance transfer can be an effective way to tackle high-interest credit card debt, as long as the person agrees to pay that transfer before the promotional interest rate expires.

But what if you don’t do this and keep spending? then in the end use one credit card to pay another will not provide any financial relief.

For his part, Howard Dvorkin, a certified public accountant and founder of Debt.com, says there’s a reason credit card companies offer 0% balance transfers: They want to make money, and they know that most consumers will not pay off their debt before that promotional interest ends.

“Instead of using those months to pay off your debts, [los consumidores] they are more likely to increase their balances,” says Dvorkin. «Debt is a disease that is easy to diagnose but difficult to cure.«.

An alternative to balance transfer cards

If you want to consolidate your credit card debt but aren’t sure if doing a balance transfer is right for you, consider personal loans as an alternative. While credit cards have variable interest rates, personal loans can offer you better terms with fixed monthly payments and rates.

If you can qualify for a lower interest rate on a personal loan, you can save money on interest as you pay off the debt. But Even if you get a low interest rate, you’re still paying more than you would with a 0% introductory APR on a balance transfer card.

So consider both options carefully and use a debt consolidation calculator to see exactly how much you could save with a personal loan.

If you think you can pay off your balance before your credit card’s promotional rate expires, a balance transfer may be a great option. But, Calculate how quickly you can pay off the balance after the promotional period expires and compare it to the full cost of a personal loan.

What to do if I cannot pay the minimum of my cards?

When money is tight not having the option to pay one credit card with another can leave you with the nagging question of how to cover your minimum payment, especially when credit card payments are taking a backseat to the bad things that will happen if you don’t pay your bills, like rent, car payments, and child care. If this is your case, this is what you should do.

  • Evaluate your situation. Review your credit card bills and your overall budget. Knowing the amounts owed, the interest rates and how much you can pay each month can help you get a better idea of ​​the seriousness of your financial situation and decide how to prioritize each bill.
  • Contact your financial institutions/card issuers and ask what your options are. We recommend that you do this if your money problem is temporary and you think you can pay off the balance later or on tight terms. You may qualify for a credit card hardship program, which could lower your monthly payments and provide temporary relief.
  • For chronic money problems, consider other options. If you’re constantly struggling to pay the minimums and feel overwhelmed by debt (for example, if your debt (excluding a mortgage) is more than 40% of your income and you can’t figure out how to pay it off in five years) filing for bankruptcy could be your best option. Consider consulting with a bankruptcy attorney to review your situation.

In conclusion

While the idea of ​​using one credit card to pay another credit card sounds appealing, it’s not as simple as making a transfer. Some balance transfer cards may offer attractive 0% APR introductory promotions, but the drawbacks may outweigh the benefits for some.

“Look out for fee-free balance transfers, 0% interest during the introductory period, and a low rate after the introductory period expires,” says Aggerwal.

If you’re considering consolidating your credit card debt, consider both balance transfer cards and personal loans as possible solutions. Do the math to get an idea of ​​how much you can save on interest and when you might be debt-free, and choose the option that best suits your needs.

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