Can you pay a credit card with another credit card?

Debt is a reality that many of us have to face in our day-to-day lives. If you’re trying to pay off some credit card debt that has gotten out of hand, using another credit card could be a good option. However, one should never take this approach using a cash advance. Instead, you can avoid the high interest and negative impact on your credit by doing it with a balance transfer credit card.

How to use a balance transfer card to pay off credit card debt

Balance transfer cards offer you the option to transfer debt and pay it down (or off entirely) during an introductory interest-free period. To get the most out of using a balance transfer card, look for cards that have no annual fees and offer cash back rewards.

If your credit is good, the Citi® Double Cash Card could be an option. It offers a 0 percent intro APR on balance transfers for 18 months. After that, the variable APR will be 14.24 percent to 24.24 percent based on your creditworthiness. The card rewards are 1 percent cash back on any new purchases and another 1 percent back as you pay those purchases off.

If your credit score is less than good, but you still want to try a balance transfer, a card like the Discover it® Secured is an option. It has a 3 percent introductory balance transfer fee, up to 5 percent fee on future balance transfers (see terms)*. The intro balance transfer APR is 10.99 percent for six months from the date of the first transfer (23.24 percent variable APR thereafter).

How to use a balance transfer card to pay off other debt

You can also use a balance transfer credit card to pay off non-credit card debt, it just takes a few more steps. You won’t be able to transfer a balance directly from, say, a loan to your new card, but there are two ways you can still make the most of an introductory interest-free period on your balance transfer card. You can pay off some or all of the loan with another card and then transfer the balance (keep in mind there’ll be a fee for each balance transfer), or you can choose a balance transfer credit card that also offers an introductory 0 percent APR period for purchases and use that card to pay off the loan.

How to do a balance transfer

Once you’ve decided on a balance transfer card, you will need to put in your application for the card, either in-person, on the phone or online. After the card has been approved, your next step will be to get your balance transferred to the new card. While different card issuers have their own policies for how to do this, generally you can make a transfer by phone or online.

Be aware that certain issuers have a time limit for when you can transfer a balance. For example, Citi requires transfers to be completed within the first four months of opening an account in order to be eligible for the intro APR. In order to make the transfer, you will need to have your account numbers, current balance information and banking information on hand. And keep in mind that balance transfers may take some time to process. While your balance transfer is in progress, you’ll need to make sure you’re keeping up with your regular payments on your old account. Once the transfer is complete, follow up to make sure that your balance for the old account is $0.

Balance transfers and your credit score

Many times when we are stuck with debt, our credit score is negatively affected. Paying off debt with a balance transfer card will also affect your credit score.

For starters, applying for a new card will trigger an inquiry into your credit report. This will lower your score a bit, but only temporarily. However, if you leave your old account open after you transfer your balance, you will increase your available credit and this will have a positive effect on your credit score. It’s best to have regular payment activity on cards, so even just setting up the old card to pay a subscription, like Netflix or a utility bill, will keep your account active and help improve your credit score—just make sure to set up automatic payments to pay the card off in full each month.

Also, having a 0 percent APR on your balance transfer card will hopefully allow you to pay down your balance faster, further increasing your available credit and having an even more positive effect on your credit score. Making regular payments will also help your credit score to increase over the life of your accounts as payment history makes up 35 percent of your credit score total.

Tips to pay off debt with a credit card

While a balance transfer card may offer you a resource for paying off your debt, it is not a magic solution. Paying off debt and keeping it under control involves certain other important steps. Here are some of the big ones.

Know how much you owe

When debt starts piling up, it is often easier to ignore what you owe than to crunch the numbers. However, the first step to getting out of debt is having an amount in black and white. So, sit down with all of your bills—car loan, medical bills, credit cards, etc. Make a list of what you currently owe for each bill. Make sure you note any interest rates that will be added on as well—these are an important factor in paying off your debt.

Come up with a plan

There are a variety of balance transfer cards out there that will offer you an introductory interest-free period to pay off the debt you’ve transferred. The best balance transfer credit cards offer introductory periods of 15 to 18 months, after which you’ll be responsible for any balance plus added interest. Before transferring your debt, take the time to figure out how much you will need to pay each month to pay off the debt before your no-interest period ends. You can use Bankrate’s credit card payoff calculator to help.

Make a payment schedule

Once you have calculated how much you will need to pay each month to pay off your debt, make a payment schedule. Late fees are only going to add to the debt you already have, so it’s important that you pay your bills on time. If you have the option, set up an automatic payment system. This will ensure consistent payment and help avoid late or missed payments.

Handle high-interest debt first

If you are dealing with debt from multiple places, handle your high-interest debt first. The introductory 0 percent APR period on your balance transfer card will give you a chance to pay off that debt without having to worry about the high interest for a while. For other debts, continue to pay your minimum payment each month until the high-interest debt is taken care of.

Use available tools

Paying off debt starts with knowing where you stand. If you’re looking for a way to monitor your credit score and your accounts in one place, sign up for Bankrate’s free credit report and monitoring tool. Another tool that is helpful for debt repayment is account alerts for when a payment is due. This is especially helpful if setting up auto payments is not an option.

Keep your options open

Balance transfer cards are helpful tools, but they aren’t for everyone. If your credit is not in a good place to add another card to your rotation, you may want to look at other options. A personal loan is another way to get some debt relief at a lower interest rate. You can also look at the option of going through a debt management service to help you negotiate payment options with your creditors.

The bottom line

Paying off debt feels amazing, and a balance transfer card can often be the key to getting there. However, paying off debt may not last very long if your spending habits don’t change. As you work to pay off your debt, also come up with a working budget for your current and future spending to keep your debt in check.