Are you wondering how to pay a credit card bill with another credit card? The right answer to this question is no. But you can use the following ways to pay your one credit card bill from another credit card: Balance transfers, personal loans, and cash advances are the most popular methods you can use to pay one credit card bill from another.
Follow These Simple Steps to Pay Your Credit Card Bill from Another Credit Card.
1. Credit Card Payment Through Balance Transfer:
Balance transfer involves the process of transferring the balance of one card to another. You can move all or a portion from one card to another according to your needs. Then you can easily repay the bill after the transfer is completed. To complete this process, you typically have to provide the necessary details, like card number, issuer name, and outstanding balance, to the credit card provider.
Important Things to Know Before a Balance Transfer:
- Balance transfer can affect your credit card score, so check all the details carefully.
- Banks typically charge a fee between 3% and 5% on the balance transfer amount, which varies from bank to bank. So consider this cost also before the balance transfer.
- Balance transfer does not reduce your debt; it just transfers from one card to another. You have to keep paying; otherwise, you will accumulate higher interest and other expenses.
2. Credit card payment through cash:
You can also make a credit card bill through cash. To use this method Use the intended credit card to withdraw the money from an ATM. Then deposit this cash into your savings account and use it to pay off your credit card bill.
Important Points to Remember Before Making a Credit Card Bill Payment Through Cash:
- Banks charge higher than usual interest rates on cash withdrawals. Usually the credit card provider charges a 2.5% to 3% credit card cash advance fee of the amount withdrawn. Oftentimes, cash advances have a fee attached to them. This is charged every time you use your credit card to withdraw cash from an ATM.
- ATM cash advances are an expensive choice for credit card bill payments, so you should consider your financial situation before using this. Else you will accumulate more and more debt over time.
3. Digital Wallets:
You can also use digital wallets to pay your credit card bill online. Digital wallets have seen dramatic growth in user base since they offer fast and convenient methods of credit card bill payment. To avail this method, you can add money to digital wallets using a credit card and then pay your bill for another credit card. The process is very simple and only takes a few minutes. You can authorize the payment by simply entering the credit card details and entering the OTP from the registered mobile number. Some digital wallets charge a fee on payments. Some wallets are operated by third parties, and some are backed by the banks. You can opt for the wallet that suits your interest.
Key Points for Using Digital Wallets to Settle Credit Card Bills-
- Make sure that your digital wallet is correctly linked to your credit card or else your payment will be failed.
- Many credit card companies have credit limits, always ensure that your credit card payment does not exceed this limit.
- Confirm the processing time to avoid late fees if your credit card issuer has tight deadlines.
- Some wallets may take longer to process credit card payments, so confirm this before the payment to avoid late fees.
4. Personal loans:
You can apply for personal loan if you have a large balance with higher interest rates. Usually personal loans have a low interest rate and can help you pay off your credit card debt. But you should also understand the credit card debt management else you will fall into the credit card debt cycle. This will result in taking more and more loans and paying credit card bills.
Important points to remember before Paying Credit Card Bills with a Personal Loan-
- Check all the fees attached to the personal loan.
- If you have multiple credit card debts then Personal Loan can help you in consolidating your debt and lower overall interest rates.
- Provide all the necessary information to fulfill the eligibility criteria for the personal loan.
- If your loan amount is higher then it can negatively impact your debt-to-income ratio.
Advantages of Making Credit Card to Credit Card Payment
Avoid late fees:
You can use this to avoid late fees if you are about to miss a credit card bill. Banks usually charge a higher interest rate on the late payments.
Earn rewards:
You can use this to earn rewards and coupons by using one credit card to pay off another.
Improve Credit Score:
This can help you in the form of an improved credit ratio by maintaining a credit utilization ratio.
Debt Management:
This can help you in the consolidation of debt by transferring debt from one card to another, possibly to a card that offers a lower interest rate.
Disadvantages of Making Credit Card to Credit Card Payment?
Fees:
Normally credit cards charge a fee of 3% to 5% on the amount of balance transfer. Also, more credit cards means more balance transfer fees, annual fees, and renewal fees.
Debt Accumulation:
If you don’t use these methods effectively, then you will accumulate more and more credit card debt over time. Which could lead you to future financial problems.
Impact on Credit Score:
This also increases the chances of missing payments and late payments if you have multiple credit cards.
No Awards:
Most of the credit card companies don’t give rewards and coupons on paying credit card debt using another credit card.
Conclusion:
Paying a credit card bill from another credit card may seem tempting because of its convenience and rewards, but it has many downsides too. Before choosing any of the above options, you should carefully analyse your financial situation. Along with it, also analyse the advantages and disadvantages carefully for every option too. In the end, go with the most suitable method of credit card debt payment. Do not make it a habit of yours, which can lead to a debt trap and higher interest rate cycles.
ALSO READ: How to Improve Your Credit Score Fast
