​​Should You Use One Credit Card To Pay Off Another? (2024)

Paying off one credit balance using another card isn’t generally possible. Banks don’t allow you to pay your credit card balance directly using another credit card. Typically payments via check, electronic bank transfer or money order are the only acceptable methods of payment.

There is one loophole: A balance transfer credit card. Read on to learn more about this exception to the you-can’t-use-a-card-to-pay-off-a-card rule.

Why You Should Not Pay a Credit Card With a Credit Card

As previously stated, other than a balance transfer, banks simply won’t allow you to pay your credit card bill by charging it to another card. But even if they did, it would be a dangerous move to try and erase debt in one place by creating it in another. This could cause your debt load to become unmanageable and affect your credit and overall financial standing.

What Is a Balance Transfer?

The only scenario where it makes good financial sense to pay off a credit card bill this way is if you’re shifting a credit card balance to one with a lower interest rate, especially to a card that has an introductory 0% APR offer. This is a balance transfer, and it’s the only time you can use one credit card to pay off another.

When you transfer a balance from a card that’s being charged interest to one that has no interest for a promotional period of time, you can save money. Here’s why.

Say you have a $10,000 balance on a card that carries an 18% APR. If you wanted to pay that balance off in a year, you’d have to pay about $916.80 per month, and the total interest charged would be approximately $1,001.60. If you transfer that balance to a card with an introductory 12-month 0% APR offer instead, you won’t be charged any interest for that year. But there are some nuances to the process.

What Are the Pros and Cons of Balance Transfers?

Although it can be used as a way to help pay down debt, a balance transfer may not be the right move for everyone. Let’s take a look at some of the pros and cons of balance transfers.

Pros

• The 0% interest offer. The primary benefit of a 0% balance transfer credit card is the 0% introductory APR offer. This no-interest period means that your monthly payments during the promo period will go entirely toward the principal balance.
• Debt consolidation. Merging the balances onto a single balance transfer credit card will consolidate your existing debt and remove the inconvenience of making multiple monthly payments.
• Lower credit utilization. With a balance transfer, your total credit increases by the amount of credit on the new balance transfer card. Assuming you don’t incur any more debt, your utilization rate will go down as you continue to make payments.

Cons

• Balance transfer fee. Most credit cards will charge a fee for transferring a balance to their card. The fee is expressed as a percentage of the amount transferred and can range from as little as 0% to 5% or more.
• Ongoing APR. If the transferred debt is not paid in full before the intro 0% offer expires, the remaining debt will be subject to the card’s regular APR which could be even higher than the card you’re transferring from.
• Credit inquiries. Credit scoring formulas consider recent applications for new credit. While a single new credit card application likely won’t lower a score significantly, applying for multiple new credit lines can.

How To Do a Balance Transfer

There are a few steps involved in making a balance transfer. First, review your existing debt and determine how much interest you’re paying on any balances. Next, identify your goals. When you’re seeking to shift your existing debt to a card with a lower rate, you’ll have to decide if you want a card with a limited-time promotional 0% APR offer, or if it makes sense to choose a card with a low ongoing interest rate. Make sure any card you’re considering offers enough time for you to make a serious dent in your debt, if not wipe it out completely.

When comparing different offers, pay attention to the terms surrounding a transfer. Be sure to calculate the cost of any balance transfer fees when deciding which balance transfer card is right for you. Once you’ve picked a card, you can often request the balance transfer during the online application process. You’ll need to have the account number available of where you want to transfer debt from. Otherwise, the application process is the same as applying for any other new card.

What To Consider Before Paying Off a Card With a Balance Transfer

A balance transfer offer is not a one-size-fits-all solution to paying off a credit card. There are considerations to keep in mind.

Balance Transfer Fee

Balance transfer fees typically range from 3% to 5% of the amount being transferred. If you transfer $10,000 to a card with a 0% APR offer but has a 3% balance transfer fee, you’ll add another $300 onto your debt. It may make sense to choose a card with the lowest balance transfer fees possible.

That said, even if you must pay a balance transfer fee, it could still help you save money overall depending on how much debt you have, what your card’s interest rate is and how long you need to pay off your debt. It always makes sense to do the math for your personal situation before making a decision.

For example, continuing the example from earlier, paying a $300 balance transfer fee rather than over $1,000 in interest charges could save you more than $700. Just make sure you stick to a disciplined repayment plan so you zero out your balance before the intro period ends, otherwise you’ll be charged interest on any remaining balance at the regular APR.

You Can’t Pay Off One Card Using Another Card From the Same Bank

Banks make money when you pay interest and other fees and generally won’t allow you to pay off one card using another card from the same bank. If you’re interested in a balance transfer offer, your best bet is to shift the balance from one bank-issued card to one with a 0% APR offer from a different issuing bank.

Your Credit Score Matters

Although a balance transfer offer can give you a leg up on paying down your existing debt, the best balance transfer offers are typically reserved for those with the best credit scores. If you’re new to credit or have a less-than-stellar credit history you might not qualify for a balance transfer card. Even those with excellent credit should be aware that every time you apply for a new line of credit, it can ding your credit score.

The 0% Period Will End

Eventually, that promotional interest-free period will come to an end. If you haven’t made much progress in paying off your debt, you could find yourself stuck paying an even higher ongoing interest rate. Before you transfer a balance to a new card, make sure that you’ll be able to pay it off within the 0% APR period.

You Don’t Know How Much Credit You’ll Get

If you’re looking to transfer $10,000 in debt, there’s no guarantee you’ll be approved for that amount on a new card. If you’re looking for the longest runway possible to pay down your debt, and the amount you’re approved for falls short of what you’re looking to transfer, then you’re stuck with two card balances to keep track of and make payments on.

The Top Balance Transfer Cards

If you think a balance transfer card is right for you, Forbes Advisor put together a list of the best balance transfer cards to suit a variety of needs.

Here are some suggestions to help you get started:

• U.S. Bank Visa® Platinum Card* which carries an annual fee of $0 and comes with a 0% intro APR on purchases and balance transfers for 21 billing cycles, followed by a variable APR of 18.74% - 29.74%. A balance transfer of 5% of the amount of each transfer or $5 minimum, whichever is greater, applies.
• Citi Double Cash® Card which carries an annual fee of $0 and comes with a 0% intro APR on balance transfers for 18 months. After that, the standard variable APR will be 19.24% - 29.24%, based on creditworthiness. An intro balance transfer fee of either $5 or 3%, whichever is greater, applies to transfers completed within the first 4 months of account opening. After that, the fee will be 5% of each transfer (minimum $5).
• Citi® Diamond Preferred® Card which carries an annual fee of $0 and comes with a 0% intro APR for 21 months on eligible balance transfers from date of first transfer and 0% intro APR for 12 months on purchases from date of account opening. After that, the variable APR will be 18.24% - 28.99%. Balance transfers must be completed within 4 months of account opening. A balance transfer fee of either $5 or 5% of the amount of each transfer, whichever is greater, applies.

Alternatives to Balance Transfers

Although a balance transfer card can be an appealing way to tackle debt, there are other options. Paying off the debt in one lump sum, for example, would eliminate the need to do a balance transfer. But short of having a pile of extra cash on hand, there’s another option to consider: a personal loan.

For those who qualify, a personal loan can be a more appealing option than a balance transfer for a few reasons. For starters, they often come with lower, ongoing interest rates than credit cards. Try our personal loan calculator to see how much you could save.

Personal loans are typically issued as a lump-sum payment so you can pay off the credit card issuer with the funds and then make monthly fixed payments to the lender. This can help your overall debt-to-available credit ratio and have a positive impact on your credit score. Keep in mind however that if your credit isn’t great, you likely won’t qualify for a great rate on a personal loan.

Credit Card Cash Advances: Just Don’t

Technically you can pay off a credit card by taking out a cash advance on another card, but this is a bad idea. When you borrow money against your line of credit, it’s typically at a much higher interest rate than the APR on your credit card purchases. Some cards may also charge a service fee of anywhere from 3% to 5% of the amount you’re withdrawing. Plus, if you withdraw the cash from an ATM, you’ll likely get socked with fees for that as well.

What Happens if You Don’t Pay Your Credit Card

Not paying your credit card bill could lead to being delinquent on your account, which will have a damaging effect on your credit score. Most credit card companies will give you a 30-day grace period before reporting your lack of payment to the credit bureaus.

After several months (time will vary by issuer) an account will be suspended or possibly even closed if no payments have been made. The next step will be having your account sent to collections, which could remain on your credit report for up to seven years.

If you’re having trouble making credit card payments, reach out to your creditors first to let them know the situation and see if you can work out a different payment plan. You may also want to contact a nonprofit credit counseling company, like credit.org, which is part of the nonprofit organization National Foundation for Credit Counseling. A certified credit counselor can help you work through a debt management program at no cost to you and help you get back on track.

Bottom Line

Although you can’t simply just use one credit card to pay off another, you might be able to take advantage of a balance transfer offer to lighten your debt load. But don’t rush to sign up for a new card with an introductory 0% APR offer before you weigh the pros and cons. If you don’t think a balance transfer is right for you, there are other options, but a cash advance on your credit card shouldn’t be one of them.

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