Can you pay a credit card with a credit card?

Female plant shop owner with credit card paying bills online at laptop in workshopImage: Female plant shop owner with credit card paying bills online at laptop in workshop

In a Nutshell

Many credit card issuers won’t allow you to make monthly payments with another credit card. But if you’re paying down credit card debt, you can transfer a balance to a card with a lower interest rate.
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Technically, you can pay a credit card with a credit card, but whether or not you should is an important question.

If you’ve ever wondered how you can rack up more credit card rewards, you may have asked yourself the question, “Can you pay a credit card with a credit card?”

The short answer is no, at least not in that way. Credit card issuers typically don’t accept credit cards as a regular payment method. Rather, they generally request that you make your payment using your checking or savings account, or with cash or check at a local branch, ATM, over the phone or by mail.

But if you’re carrying a balance on a high-interest credit card, you can do what’s called a balance transfer. Balance transfers allow you to take the balances on your existing cards and transfer them to another credit card.

Several credit cards offer a 0% introductory APR on balance transfers for a set promotional period. But before you try it, there are a few things you should consider.

With a promotional rate that comes with many balance transfer cards, you can reduce the amount of finance charges associated with the balance and better position yourself to pay off the debt.

What to know about balance transfer cards

Doing a balance transfer usually only makes sense if you’re transferring the debt to a card with a promotional intro rate or a lower interest rate. 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 amount of time.

And if you can pay off your balance within the promotional period, you can save both money and time as you eliminate interest from the equation.

But many major balance transfer cards charge a balance transfer fee, typically 3% to 5%. So if you’re looking to transfer $10,000, you might be on the hook for an up-front fee of about $300 to $500.

Balance transfer cards aren’t always the best option

There are a few reasons you should think twice before applying for a balance transfer card. The first is that there’s no guarantee you’ll get a high enough credit limit to transfer your full balance.

And even if you get a high credit limit, most cards have limits on balance transfers that may be lower than your available credit. Also, most issuers won’t allow you to transfer balances from cards that you already have with them.

Your credit limit is typically determined based on certain credit factors, including the following:

  • Income
  • Credit scores
  • Payment history
  • Credit utilization
  • Housing costs

Second, applying for a balance transfer card could hurt your credit scores due to the hard inquiry. For example, every time you apply for a new credit card, you’ll likely receive a hard inquiry on your credit reports. A hard inquiry will lower your scores right away, but it usually only affects your scores for a short period of time.

And while the inquiry may remain on your reports for up to two years, it likely won’t affect your scores for that period of time. Also, 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 age of your credit history.

Lastly, you may not get approved for a balance transfer card if your credit scores are too low. Before you apply for a card, check out Credit Karma Approval Odds, a feature designed to help you gauge the likelihood of getting approved for some specific credit cards.

An alternative to balance transfer cards

If you want to consolidate your credit card debt but aren’t sure about doing a balance transfer, consider personal loans as an alternative. Whereas credit cards come with variable interest rates, personal loans may offer you better terms with fixed rates and fixed monthly payments.

If you can manage to qualify for a lower interest rate on a personal loan, you can save money on interest as you pay down your debt. But even if you get a low interest rate, you’re still paying more than what you’d pay with a 0% introductory APR on a balance transfer card — as long as you can pay off the balance transfer during the promotional period.

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 promotional rate expires, a balance transfer can be a great option. If not, consider how quickly you plan to pay down the balance after the promotional period expires and compare that to the total cost of a personal loan.

Bottom line

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

If you’re considering consolidating your credit card debt, consider both balance transfer cards and personal loans as a possible solution. Do the math to get an idea of how much you can save on interest and when you could be debt-free, and go with the option that works best for your needs.

About the author: Ben Luthi is a personal finance freelance writer and credit cards expert. He holds a bachelor’s degree in business management and finance from Brigham Young University. In addition to Credit Karma, you can find his wo… Read more.