Can you pay off a credit card with a credit card?

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  • You can’t use a credit card to pay another credit card bill, but you can consolidate debt by transferring it to a new credit card.
  • Balance transfer credit cards can help you limit interest fees, but you’ll usually have to pay a fee for the transfer.
  • You can also use a cash advance from a credit card to pay off debt on another card, but you’ll be charged a high APR (think 25% or more).
  • Using either of these methods can help you consolidate credit card debt in a pinch, but whenever possible you should pay off your credit card bills in full.
  • See Business Insider’s list of the best credit cards »

If you’re one of the many folks with more than one credit card, the following question has probably crossed your mind:

Can you pay off a credit card with a credit card?

The short answer is “sort of.”No, you can’t get rewards points from the process, or magically vanish debt by bouncing it back and forth between two cards forever, but yes, there are a few ways to leverage one credit card when paying off another.

The process is called a balance transfer, and even though it’s often possible, that doesn’t mean it’s the right move for every person or every situation. It can be a helpful way to consolidate debt onto a single card, or lower back-breaking interest rates, but it can also open you up to a whole host of complications if you aren’t careful.

What’s at issue here?

First of all, let’s get to the reason we’re even talking about this. Normally, when you pay off a credit card, you do it with cash or a transfer from your checking account (in short, money that you already have).

So things can get slightly more complicated when you’re looking to use credit (read: money that you don’t have) to pay off an owed balance. For that reason, you can only use a credit card to relocate debt, never to pay off your regular monthly balance.

Options for paying and managing debt with a credit card

Luckily, credit card companies have given this issue some thought, and have left cardholders a bit of wiggle room for emergencies and extenuating circumstances.

Cash advance

The first way you can use one credit card to pay off another is by using your credit card to borrow cash from an ATM or your local bank branch. This is called a cash advance, a method that’s convenient in a pinch, but best not to rely on long term. That’s because where cash advances go, hefty interest rates tend to follow. Many popular credit cards offer cash-advance APRs above 25%, which can be double the rates you’re used to on your credit card.

It’s worth noting that these rates are vastly preferable to those for payday loans, but there’s more to consider. Not only will your bank likely charge you an additional fee of 3% to 5% of the total advance, but these transactions have no grace periods, meaning interest starts piling up the moment you swipe your card.

Balance transfers

As the name suggests, a balance transfer is the process of moving your debt from one card to another. It’s preferable to getting a cash advance, but can still come with its fair share of obstacles. Unless you specifically seek out a credit card that encourages balance transfers — more on that momentarily — you’ll be dinged 3% to 5% of the transferred amount. Plus, the transfer process can take weeks, and not everyone has the luxury of being able to wait that long for the funds to become available.

Your best bet is a balance transfer credit card, which will offer incentives like 0% APR for 18 months, to give you a chance to pay off the balance before getting penalized. Just make sure you read the fine print so you’re ready for the rate increases, annual fees, and rules that kick in afterward.

When should I pay off my credit card with a credit card?

If you have a pile of high-interest debt on one of your cards, you should absolutely look into a balance transfer, as it can significantly lower your payments. Just make sure that you either go the balance transfer credit card route or choose a card with an APR significantly lower than what you’re paying now. If you’re going to be paying more in transfer fees than you’ll be saving in interest, skip it.

But of course, not every situation allows for all that consideration. If an emergency calls for an immediate cash infusion and you’re deciding between a payday loan and a cash advance, go for the cash advance every time. According to the Consumer Financial Protection Bureau, the average payday loan has an interest rate of over 400%, and there’s absolutely no reason for borrowers to be preyed on like that.

When shouldn’t I?

If your aim is simply to redistribute debt instead of consolidating it, this probably isn’t the way. For the balance transfer process to make any sense whatsoever, you’ll have to close the original card, so if you aren’t ready or willing to do that, hold off until you are.

Overall, if you have other options, try those before moving to pay off a credit card with another credit card. Use it as a tool to streamline monthly payments and lower interest rates, sure, but don’t rely on it as a magic pill. Whenever possible, pay off your card in full each month to avoid getting into a debt cycle.

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