Wondering whether you can pay off a credit card with a different credit card? Well, you can, but the real question to ask yourself is whether you should.
To pay off one credit card using a different credit card, you would need to withdraw cash from a cash machine using the card and then either pay this in along with the payslip that came attached to your statement, or pay it into your current account and then pay your credit card balance online.
However, there are two very important things you need to know before you do this. First – withdrawing money using your credit card is classed as a ‘cash advance’ because you’re borrowing the money you’re taking out. You may be charged a one-off fee for making the withdrawal, and you’ll also have to pay interest on it. This is often charged from the day you withdraw the cash.
Second - withdrawing cash from a hole in the wall with your credit card will show up on your credit history. You should always check how cash advances are treated by your lender before you make your withdrawal.
Is there another way?
As you can see, paying off your credit card with a credit card is far from the ideal solution. However, depending on your circumstances, there are alternative options.
Before you do anything though, ask yourself why you’re considering using a credit card to pay off another credit card. If you’re borrowing just to keep up with your monthly minimum payments because you can’t afford them otherwise, it’s worth getting financial advice. The Money Advice Service offers plenty, and can provide you with support to help you get back on top of your borrowing.
If you feel you’re in control of your debts but you just want to simplify them, you have a few options. Let’s take a look at two of them:
If you have a couple of credit cards or store cards and you’re finding it difficult to keep track of the different payment dates, balances and interest rates, a balance transfer card could help you simplify matters. It might even help you to reduce your monthly repayments.
A balance transfer card is designed for you to pay off the balances you have outstanding on other cards with the new card, and then pay this off in manageable monthly instalments. This does away with having to keep on top of multiple balances.
Some balance transfer cards come with an introductory offer of 0% for a certain period. Providing you clear the full balance on the card within this time, you won’t have to pay any interest – you’ll pay back what you owe and nothing more.
While a balance transfer card can only be used for you to transfer balances from other cards, a money transfer card transfers cash from the card directly into your current account. You can then use this to clear your other credit or store card balances, as well as any personal loans or overdrafts you have.
Whether you use a balance transfer or a money transfer card, you are borrowing to pay off your borrowing. It’s therefore a good idea to avoid borrowing any more until you have paid these balances offer. If you do, you could struggle to afford all your repayments and see your debts quickly become unmanageable.
We hope this has answered your question about whether it’s possible to pay your credit card balance using a credit card. If you’re considering taking out either a money transfer or balance transfer card but you’re not sure which, you can find out more about their differences in this blog.
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Intelligent Lending Ltd (Credit Broker). Capital One is the exclusive lender.