If you have reached the point to ask the question – Can you pay a credit card with a credit card – then most probably you are beginning the vicious repayment circle. You should consider this as an alarming situation because you are on your way to enter the vicious repayment circle. The vicious repayment circle means that you are paying the minimum on one credit card and then withdrawing the same money to pay the minimum monthly payment on other credit card. Even more extreme form of the vicious repayment circle can be considered the need to pay a credit card with a credit card. This means that you don’t even have the money to pay your credit card obligations.
Don’t get panicked immediately. The need for paying one credit card with another credit could have occurred because you have forgotten to take cash with you when you should pay the minimum. This scenario is rare. Most often, people want to pay a credit card with a credit card because they are faced with lack of cash to pay the minimum requirement. Stated differently, you have run short on cash at the moment or during the specific month. If this is a onetime occurrence then it is nothing serious, but if it is repeating continuously each month, then it is a signal that you manage your finances inappropriately or that you higher level of debt then you can actually pay.
Whatever the reason, the fact remains that you need to make the minimum monthly payment on your credit card and you do not have the needed cash at the moment. So, can you pay a credit card with a credit card? The simple answer is “Yes”, but then the question, is whether you should do it?
Can you pay a credit card with a credit card?
As it was mentioned before, the answer is –Yes. You can pay the minimum payment on one credit card with another. The problem is that, you can’t do it the way you think you could. You can’t pay directly your credit card bill with another credit card. Meaning that, with majority of issuers, you can’t simply type the credit card number online from another issuer for the sake of making the minimum payment. The reason why major card issuers won’t allow you to pay directly you credit card bill with another credit card is the merchant fee. If a card issuer allows you to use another credit card to pay credit card bill, then your issuer is liable to pay the merchant fee. This merchant fee could be around 2.5% of the payment amount. Consequently, the issuer will not receive the full amount of your credit card bill. Although you can’t use directly one credit card to pay another credit card, you can use it indirectly though. Some of the ways you can use a credit card to pay a credit card are: cash advance, balance transfer, convenience check and Rob Peter to Pay Paul method.
Cash advance – you could withdraw money from one of your credit cards to pay the bill on other credit card. You can go to the ATM, and make a withdrawal. Afterwards, deposit the same money on your checking account. Use that money to make the minimum credit card payment on your other card.
Balance transfer – In case you are in a financial problem to meet you minimum monthly payments on your credit card than you could also do something else. You could be grasping the benefits from different credit card promotions. You could transfer your balance to a credit card which is offering a 0% APR for the first year. Thus you will reduce your cost. One year should be enough time for you to pay off your credit card debt, without any additional cost. But before going for this alternative, make sure you are aware about the fee charged. Namely, although this alternative can provide you with a 0%, it does entail a fee charged for a balance transfer (it can be around 3%). Thus make sure that you go through the bank switching offers and benefit from possible waiving of fee. In addition, if you don’t pay your minimum payment regular, your 0% APR period could be canceled.
Convenience checks – Could be another way of how you can pay a credit card with a credit card. Namely, convenience checks (or credit card check) are issued on the basis of consumer’s credit card account. Accordingly, having convenience checks will enable you to make purchases or take cash advances.
Rob Peter to Pay Paul method. As it was mentioned earlier, the inability to pay your credit card minimum payment could be due to current cash flow problems. In such a situation, there is no need to worry. You could use this method to collect the needed cash. Using this method means that you will be using your credit card for everyday purchases you normally do with cash. Consequently, you will be able to free up the cash needed to pay your credit card bill.
The aforementioned methods are providing the answer to the question – Can you pay a credit card with a credit card. But what you should consider is whether it is a smart move to pay one credit card with another credit card. You should be careful not to get caught in the vicious repayment circle.
Before deciding if you will use a credit card to pay the minimum amount on other credit card, you should be aware about the main drawback. Namely, these alternatives are extremely costly for you. First, using these methods to pay a credit card will result in high interest rate burden. Meaning that the credit card by itself is a high interest rate product. The interest rate could go north of 13% on some credit cards (see trends in credit card interest rates). Second, the issuer might charge you a cash-advance fee of anywhere from 2% up to 5% (n some circumstances even more). Moreover, you could also be charged a fee using some of these methods. For instance, you could pay an ATM surcharge fee. While you have found a way how to pay your credit card minimum payment when you have cash flow problems, you have also found a way how to increase the amount you owe even more. This is in a sense that, using funds from credit cards could result in a threefold expense for you. Since, you could end up paying the high interest on your credit card from another issuer, cash advance fee and /or an ATM surcharge fee. Before making any decision, make sure that you have gather all the relevant information. Also, make sure that you are aware and more importantly, you understand the cost of using any of these methods, and how they will affect your finances in the future.