Can You Pay a Credit Card With Another?

A credit card functions as a revolving line of credit, allowing users to borrow funds for purchases and repay them. The primary purpose of a credit card is to facilitate purchases and provide short-term financing, rather than serving as a direct mechanism for debt transfer between accounts. This fundamental design often leads to questions about using one credit card to pay off another.

Credit Card Payment Fundamentals

Standard methods for paying a credit card bill involve electronic transfers from a bank account, mailing a check, or setting up online bill pay. Many financial institutions allow payments through online portals or mobile apps, linking checking or savings accounts. Some issuers may also accept cash payments at bank branches.

Credit card networks and financial institutions do not permit direct card-to-card payments. Credit cards are primarily for consumer purchases, not circular debt management. Direct card-to-card payments could shuffle debt without reducing it, increasing risk for issuers and cardholders. The underlying infrastructure and rules prevent such direct transfers, emphasizing bank accounts for bill settlement.

Utilizing Balance Transfers

A balance transfer is a process where existing credit card debt is moved from existing accounts to a new credit card, to secure a lower interest rate. This is advantageous if the new card offers a promotional 0% APR for an introductory period. To qualify for these offers, applicants need a good to excellent credit score, often 690 or higher. Issuers also restrict transfers between cards from the same financial institution.

The application process for a balance transfer involves applying for a new credit card with a balance transfer offer. During the application, or after approval, individuals provide details of the existing debt, including issuer, account number, and amount. The new card issuer then directly pays off the specified balance on the old account. Balance transfer fees, typically 3% to 5% of the transferred amount, are added to the new balance.

Once the balance transfer is approved, the process takes several days to weeks. It is important to continue making minimum payments on the old account until the transfer is fully processed and appears on the new card. After the promotional APR period concludes, any remaining transferred balance will accrue interest at the card’s standard variable APR. A repayment plan is important to pay down the debt before the introductory period ends.

Cash Advances and Their Mechanics

A cash advance allows a credit cardholder to obtain cash by borrowing against their credit limit, unlike a standard purchase. Cash advances are obtained through ATMs with a PIN, bank tellers with ID, or convenience checks. The amount available for a cash advance is a portion of the overall credit limit.

Cash advances incur specific fees and higher interest rates compared to regular purchases. Fees are a flat amount or 3% to 5% of the sum, or a minimum of $10. Interest begins to accrue immediately from the transaction date, without the grace period offered for purchases. Interest rates are higher than purchase APRs, reaching 20% to 30% or more. These immediate costs make cash advances an expensive way to obtain funds.

Alternative Payment Approaches

Credit card convenience checks are blank checks provided by credit card issuers, drawing directly from the card’s credit line. These checks can be used for purchases where cards are not accepted or to pay other debts. However, transactions made with convenience checks are treated as cash advances, subjecting them to the same high fees and immediate interest accrual. Interest rates are significantly higher than regular credit card APRs, with no grace period.

Third-party payment services like Plastiq enable users to pay bills with a credit card, even if the recipient does not accept card payments. These services act as intermediaries, processing the credit card payment and sending funds to the biller via bank transfer or check. While these platforms do not allow direct card-to-card payments, they can indirectly help by allowing expenses like rent or utilities to be paid with a credit card. This frees up cash in a bank account, which can then be used to pay down other credit card balances. These services charge a processing fee, around 2.9% for credit card payments, plus any delivery fees.