One advantage of credit cards is that you can use them for daily expenses, such as filling the gas tank or buying groceries. When it comes time to making monthly card payments, it might be tempting to use one credit card to pay another if you find yourself low on cash.
While there are ways to use one line of credit to pay another, this strategy isn’t always easy. Most lenders only accept payments from a bank account or possibly a money order.
Getting cash from one card to pay another
While it is almost impossible to pay one card directly with another, you can still use one line of credit to pay debt on another line of credit. There are two ways to do this: taking cash from your card and using convenience checks. Both come with extra costs and add to the balance on the card you’re using, which could mean additional interest on the second card.
Most credit cards allow you to get cash instantly by going to an ATM and withdrawing money from your line of credit, which is called a cash advance. You can then deposit these funds in your bank account and use the money to pay another card, or use the cash to buy a money order or cashier’s check to send to the credit card company. However, you’ll typically pay a transaction fee, and most cards also charge a higher interest rate for cash advances. Unlike with regular purchases, you begin accruing interest on the date of the cash advance instead of getting a grace period.
You can also mail a convenience check to make a payment on another credit card. Many credit card companies issue checks that look just like the checks that come with your checking account. As with regular checks, you simply write the name of the entity you want to pay, along with the amount to pay, and then sign on the bottom. However, convenience checks also incur a higher interest rate than regular purchases. You may also pay an additional fee.
Using a balance transfer to pay one credit card with another
You can transfer an existing balance to another card. One of your current credit cards may already allow you to transfer another balance, or you may get an offer for a new credit card that allows you to transfer an old balance.
You’re not technically paying that balance but simply shifting it to another card; you’ll still need to pay it, and you may pay a fee to transfer the balance. Still, you may save money by transferring to a card with a lower interest rate or one that waives the interest for a specified period of time, and combining balances onto one card can help you manage your payments.
Check out Bankrate’s list of the best balance-transfer credit cards.
Credit card companies typically don’t accept payments directly from other credit cards, and while there are a few ways around this, it may not be worth the extra expense or effort.
However, it may be a sound option for dire circumstances, like when you’re temporarily short on cash and can’t make the minimum payment on one of your cards. Instead of missing a payment and damaging your credit score, you can use funds from another card to help you get by until you have enough cash on hand.