Can I pay off credit card debt with a credit card?

You can pay credit card debt with another credit card by either using a balance transfer card, a money transfer card, or withdrawing cash with your card. However, you could end up paying more in interest and fees, so make sure you weigh up all the options first.

5 min read
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Is it possible to pay off credit card debt with another credit card?

It is possible to pay credit card debt with another credit card, but not in the same way that you would with a debit card. Credit card lenders don’t often let you pay off their cards with credit.

In order to pay credit card debt with another card you have three main options: 

  1. withdraw cash using the card
  2. use a balance transfer card
  3. use a money transfer card

1. Cash advance - or cash withdrawal

A cash advance is when you borrow money from your credit card via a cash machine or at the bank. You can then pay the money directly into the account you wish to pay off. Or you can transfer it into your current account and then clear your credit card balance online.

Withdrawing money using your credit card is classed as a ‘cash advance’ because you’re borrowing the money you’re taking out. You are, in effect, moving the debt from one card to another.

However, you may be charged a one-off cash advance fee for making the withdrawal (of around 3%), and you’ll also have to pay interest on it (usually at a high rate). This is often charged from the day you withdraw the cash. You may also face maximum withdrawal limits, which may not be as high as the credit limit on your card.

Bear in mind, withdrawing cash from a hole in the wall with your credit card will show up on your credit history and can give lenders the impression that you are desperate for cash.

This could reduce your chances of getting accepted for credit in the future. So, you should always check how cash advances are treated by your lender before you make your withdrawal. You can find more information in the lender’s terms and conditions.

2. Balance transfer card

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’s designed for you to pay off the balances you have outstanding on other cards with the new card. You 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.

However, if you don’t pay off the full balance during the fixed introductory period, you’ll end up paying interest. Many credit cards also charge a fee for balance transfers, typically around 3%, meaning that you may actually pay more money overall.

3. Money transfer card

money transfer card moves cash from the credit 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.

A money transfer card can offer you more flexibility than a balance transfer card as you can pay off more forms of credit with it.

As with a balance transfer card, there is often a fee for making the transfer. So, it’s important to research fees and interest before applying.

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Should I pay off one card with another?

Whether you should pay one card off using another depends entirely on your personal financial circumstances. 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, it’s worth getting financial advice. Citizen’s Advice offers plenty and can provide you with support to help you get back on top of your borrowing.

If you believe that paying off one credit card with another is a viable option for you, there are some risks involved that you should be aware of in order to make the best decision.

What are the risks?

  • you’re not technically paying off your debt, just moving it from one place to another. If you are worried that paying off one credit card will make you feel like you can spend more credit, then you should avoid this option
  • you may end up owing more money on your new card than you did on your old one through fees and interest. It’s important to research all of the costs involved with the new card before applying
  • if you have multiple credit cards, then consolidating your debts into one credit card may help you manage your monthly payments more easily. But owing a large amount on one card that has a lower credit limit can affect your credit utilisation rate negatively. In other words, it may appear that you are maxing out your credit card limit, which can make you look risky in the eyes of lenders
  • you may also damage your credit score by taking cash out with your credit card because it will show up on your credit history. It’s not looked on favourably by some lenders because it can give the impression that you’re struggling to manage your finances. Having said this, lenders all have different criteria, so it’s best to check first