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Credit cards are convenient tools to cover both planned purchases and unexpected expenses. They offer consumers a way to pay a lump sum up front and then make smaller, more manageable monthly payments on the balance.
However, using credit cards can be a slippery slope when they're not managed thoughtfully. It can be easy to overspend and end up with high balances and large monthly payment obligations.
Millions of people every year miss a credit card payment or pay late. A 2021 survey by WalletHub found that roughly one in six respondents said they expected to miss at least one credit card due date in 2022.
Consumers who are short on cash and facing potential missed payments may consider using one of their credit cards to make a payment on another.
A credit card payment can't be directly paid by another credit card.
"But when there's a will, there's a way," says Adem Selita, CEO and co-founder of The Debt Relief Company. "If a consumer really wanted to, they could technically use a balance transfer or take a cash advance against their credit card to pay down another credit card."
Credit cards allow you to transfer one credit card balance to another. Balance transfers typically cost 1% to 5% of the transferred amount. For example, transferring $1,000 to a credit card that charges a three percent transfer fee would cost $30. Interest rates also apply.
With a cash advance, you borrow cash from your credit card company and pay it back over time.
"For example, if your credit card has an APR of 18%, you could get an advance of $500 and repay $525 over time — for a fee of $25 plus interest charges," explains Kristin Uptain, a payment industry expert and Marketing Manager for Redde Payments. "Some cards will also charge interest on the cash advance from the day it's taken out until it's repaid in full."
While balance transfers and cash advances are available to consumers and it's possible to use them to make credit card payments, neither of them addresses the debt or helps pay it down. They simply move the balance from one card to another.
A balance transfer allows you to move part, or all, of the current balance to a new card. This is a popular choice when a credit card offers better terms. Sometimes credit cards offer low, or even zero percent, introductory annual percentage rates (APRs) for a specified time. There's also usually a balance transfer fee that's added on to the balance.
To initiate a transfer, you can call the credit card company, or use the checks credit card companies sometimes provide. A balance transfer will typically cost 4% of the amount debited, which is essentially the same thing as an upfront interest payment, Selita explains.
The biggest benefit of doing a balance transfer is that you can get a lower interest rate and not miss a monthly payment.
"If you're looking for a short-term solution to your credit card debt, balance transfers can be a good option," Uptain says.
The drawbacks of using a balance transfer to pay a credit card payment are that they do nothing to decrease your total debt load, and, if you don't pay the balance off before the introductory period ends, it can cost you steep interest fees.
You can get a cash advance against your credit card's limit and receive the money from an ATM or at a bank.
Consumers can access money from a cash advance immediately, which is helpful if they need to pay a bill that's due soon. However, there are significant downsides to borrowing money via a cash advance.
Selita points out the most important consequence to be aware of: "Cash advance fees can be tremendous."
In addition to the fees your credit card company will charge at the outset (typically 3% to 5% of the total amount advances), you're likely to pay significantly higher interest on the cash borrowed. Some cards charge rates around 30%. You're also unlikely to have a grace period, meaning interest will start accruing immediately.
Between the two options, a balance transfer is the better move, according to Uptain.
"Cash advances are often used by people who have no other way to get money quickly," she says. "In general, it's better to use a balance transfer than a cash advance."
While using balance transfers and cash advances to pay your credit card payments is possible, it's not a wise financial move. Neither option helps pay down your debt, and they can cost you even more in interest and fees. You may end up worse off than before.
Using credit to pay monthly credit obligations is generally not a good idea. Using credit cards to make payments only moves money around, which can mire you further into debt.
Instead of using a cash advance or balance transfer to cover monthly credit card payments, consider these five alternatives.
Applying for a personal loan at a bank or credit union may help you consolidate payments and secure a lower interest rate. Personal loans may decrease the total monthly payments required, especially if you carry balances on several credit cards.
A personal loan is a suitable form of debt consolidation. These rates start at a fraction of what credit cards would charge.
Parents, siblings, or close friends who are financially stable may be willing to help a loved one out with an interest-free loan. Borrowing from friends and family relieves the stress of worrying about paying late, which can cause your credit score to decrease if creditors report it to the credit bureaus.
If you're looking for a short-term way to meet your credit card payments, why not get rid of some items you no longer need or use? There are several ways to sell your clothing, jewelry, home décor, furniture, and electronics online. While this won't completely erase your debt, you may be able to raise enough funds to keep cover the payments that are due.
If your bills add up to more than your income, think about a second job or side hustle. Find an online job, pick up a few shifts at the mall, or drive for Uber or Lyft. A few hundred extra dollars a month goes a long way toward covering your credit card payments.
Contrary to popular belief, your credit card terms aren't written in stone.
"Lower your interest rate, if possible," Uptain advises. "If you have good or excellent credit, ask your issuer if they'll lower your rate. They may offer a lower rate or waive annual fees if you've been a customer for a long time — even if your account is in good standing — which can save money on interest over time."
Making a credit card payment with another credit card is indirectly possible by using balance transfers and cash advances. These options, however, aren't recommended since they don't help decrease your debt load. It's smart to look for other ways of making credit card payments, so you can lower the amount you owe and eventually get out of debt.
"Paying a credit card bill with another credit card is usually ill-advised," Selita says. "There's a reason credit card companies don't allow these transactions to be performed directly."
