Can You Pay Off Credit Card With Another Credit Card
It is non exactly possible to pay off one credit card's debt with another card, but that doesn't hateful you can't do a balance transfer to avert paying interest on that debt. This article tells Read the pros and cons of a residue transfer, along with tips to do it right.
As a credit card customer who already has more i carte du jour, or who may exist considering getting a second carte, you could be asking yourself, "Can I pay off the balance of one card with another card?"
While the short answer is "No," there'southward some other question you should inquire yourself: "Why should I?"
In some cases, moving a credit card residual onto another card (known as a residual transfer) makes skillful financial sense, because it can simplify your payments and may assist you lot save on interest charges.
Notwithstanding, sometimes paying one card off with another can pb to more fiscal problems.
Tin can You Pay One Credit Carte With Another?
No, You lot Can't Pay One Menu with Another
While it's non what anyone wants to hear, the fact of the matter is that well-nigh issuers just don't allow y'all to plug in the number from Credit Card B to pay the pecker for Credit Card A.
There are two main reasons backside this restriction, both more or less what y'all'd await (i.e., about money).
The first reason is based on the same gripe just about any company has with credit cards: the fees. On an average credit carte du jour transaction, credit card processing fees are about 2% of the transaction total.
For a $1,000 payment, the merchant would need to pay a whopping $20 to have the transaction processed. A checking account transfer, on the other hand, can usually be completed for less than $ane.
The table below illustrates the trouble with credit carte du jour processing fees.
The second reason for the restriction is exactly the reason many people want to utilise i credit carte du jour to pay another credit card neb: rewards.
If consumers were allowed to brand a large purchase on one credit carte du jour, rack up rewards, so earn more rewards on a divide carte from paying the bill for the outset one — well, the credit bill of fare issuers would chop-chop get-go hemorrhaging coin through their rewards programs.
Options for Paying off One Credit Carte du jour With Some other
Cash Advances
Near credit cards won't let you pay your bill direct with another credit card, however, yous can take out what'south chosen a cash advance. A cash advance is a cold hard cash issued through your credit card provider either at your local branch, ATM, or supermarket.
While this sounds convenient, at that place are usually some pretty hefty fees that back-trail your greenbacks advance, and then you'll want to accept those into consideration.
Fees
At that place is an initial fee to withdraw the coin, either a flat fee off the elevation or a percentage based on how much you withdraw. In Commonwealth of australia, cash advance fees are generally around three% or $v, whichever is greater.
While this doesn't seem too sinister, call up you are calculation to your overall credit card balance when yous take a cash advance, therefore increasing your total involvement rate over time.
While a cash accelerate may solve your problem temporarily, you are essentially just shuffling your debt from one creditor to another and increasing your debt in the long term – ouch.
Consider a Residue Transfer Instead
Another option to consider is a balance transfer, which allows yous to transfer the balance of your credit card to a new menu with a 0% APR promotion.
There are a few that offering twelve months interest-free, however, you demand to have excellent credit in guild to score this bargain, and there is of course a fee involved.
Virtually creditors accuse between 3 and 5%, so it'south worth considering whether this additional fee is something you can afford to pay back in addition to your existing residue.
You'll as well need to call back nearly whether or not you'll be able to pay off your card past the end of the introduction flow. If not, your interest charge per unit volition jump quite aggressively.
A late payment may as well mean you lot lose your 0% involvement rate, so you lot've got to be diligent if you chose this option and pay your card on fourth dimension.
Another thing to watch out for with balance transfers is their terms and conditions.
Some cards, if non paid back during the introduction menses, will backdate the interest all the way back to the balance transfer, which may end upwardly costing you more than you bargained for.
By Redeeming Rewards
While this is probably non the most practical method for the majority of people, at that place is a way to use the rewards you earn on one credit card to pay some or all of the nib for another card.
Similar to the cash advance method, information technology volition involve a checking account.
The showtime pace is to redeem your rewards. If yous are redeeming a cashback advantage, this is equally easy as simply having the credit card issuer deposit the money into your checking business relationship.
Most rewards programs that use miles or points will also provide a cashback option.
Once deposited into a checking account, the cash rewards can be used to pay any bill you like, including a credit menu. The best part of this method is that you.
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The Best Method is to Save Before You Buy
Of course, when it comes to credit cards, the best method of all is to just save the necessary cash earlier making whatever purchases.
Not just will this save you from having to scramble to avoid paying a bill belatedly, or missing a payment birthday, but volition also ensure you don't end up paying a lot of interest.
Ane of the most effective methods I've learned for saving, especially for big items, is actually based on more than of Alan'due south sage advice.
To begin with, get a sideslip of paper describing what you want (maybe an ad for that new Goggle box, or, in Alan'southward case, the design for a new tattoo) and place information technology in a jar. Then, every twenty-four hour period or calendar week — or just when you can — add money to the jar. That's it.
Over time, the jar will fill upwardly, and, eventually, you will have saved the money needed for whatsoever you placed in the jar. When the time comes, if you haven't changed your mind about what yous desire, and so go for it.
Charge the buy for the cashback or travel miles, then pay the beak — in full — with the cash you saved specifically for that purpose. No late fees, no involvement payments, and no worry over an unpaid nib. Voila!
FAQs
How do I know if a balance transfer is right for me?
If yous have a high-involvement credit carte racking upward debt and desire to move this amount to a lower-interest card, consider a balance transfer for debt consolidation. Residual transfers are a helpful tool for anyone able to pay off this balance rapidly and within the promotional period before involvement rates rise.
Sometimes our finances can get the best of us. Even when it might seem like paying the minimum payment on your credit card is a tough task, you need to power through. If not, your credit score could be at risk.
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Source: https://suntrustblog.com/paying-one-credit-cards-debt-with-another/
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