Credit card bills can be stressful, and the high-interest rates make it difficult to get rid of the heaping credit card bill. In such cases, paying a credit card bill using another credit card makes it seem like a heavenly solution.
However, it is not possible to directly pay off credit card debt using another credit card. This doesn’t mean that this task is impossible.
Here are a few methods which you can use to pay a credit card bill using another credit card.
Methods to Pay Credit Card Bill With Another Credit Card
Now that we are clear when to use a credit card to pay for another credit card bill, we can move on to the various methods you can use to make this possible.
Here are three ways to pay a credit card bill with another credit card.
1) Balance Transfer
A balance transfer is one of the easiest and most efficient ways to pay your credit card bill through another credit card. This method is best if you want to pay off a credit card with a high rate of interest, with the one with a much lower rate of interest.
Although balance transfers usually have a small fee, it is still better to make one of the credit card bills that is affecting your credit report and you are paying only the minimum dues.
Many banks have started to offer balance transfer on their credit cards, especially if you have a good credit score. You can use this balance transfer facility to pay the bill for a high-interest credit card.
However, you need to keep in mind that balance transfers come with a fee. Banks often charge a 3% to 5% on the balance transfer.
Also, remember that continuous balance transfers can affect your credit report, which in turn will affect your CIBIL score.
2) Cash Advance
Another way of paying your credit card bill using another credit card, is by withdrawing cash through an ATM using your credit card.
Since you cannot directly transfer your money from one credit card to another, you can withdraw the bill amount through the ATM and pay the credit card bill using it.
Follow these three steps to pay the bill through a cash advance.
- Using a credit card, withdraw the needed cash through an ATM.
- Deposit the money in your bank account.
- Pay the credit card bill online or offline using the withdrawn cash.
You must remember that cash withdrawals come with a high rate of interest and this method should only be used as a last resort. You will not only have to pay the interest on the withdrawn cash, but you will also have to pay an additional fee.
Consider this as an example. Axis Bank charges ₹500 for every amount withdrawn through the ATM. Moreover, you can only withdraw up to ₹10K in one go. Therefore, if you want to withdraw ₹20K, then you will have to make two withdrawals with a total fee of ₹1000.
E-wallets have proven to be extremely beneficial since their introduction. No surprise here, you can also use them to pay your credit card bills using another credit card.
To make a payment through e-wallets follow the steps.
- Add money to your wallet using the credit card you want to pay your bill through.
- Next, use the same e-wallet to pay your credit card bills.
For this, make sure you are using an e-wallet that lets you pay your credit card bills.
If your e-wallet doesn’t allow you to pay credit card bills, then follow the below-mentioned steps.
- Add money to your e-wallet using the credit card you want to pay your bill with.
- Transfer the added funds from your e-wallet to your bank account.
- Using online banking tools, pay the credit card bill.
E-wallets usually do not charge any money for transactions. But some e-wallets do charge for transferring funds from wallet to bank account.
Moreover, if you use an e-wallet for paying credit card bills, you may also stumble upon cashback or some amazing offers.
When To Consider Using A Credit Card to Pay Off Credit Card Bill
Although paying a credit card’s bill using another credit card seems like a great option, it is not a very good choice if practiced multiple times. Not only will it affect your credit score, but it will also lower the chances of getting benefits on your credit cards in the future.
So, here are three reasons for using a credit card to pay another credit card’s bill.
1) Lower Rate of Interest
You should consider paying the complete credit card bill with another credit card if the latter offers a lower rate of interest.
Doing this, you can reduce your monthly credit card bills, and also clear the outstanding of the other card.
Moreover, with a lower credit card bill, you are more likely to make timely and complete payments, hence increasing your credit score.
2) High Credit Card Bill
Most of the time, people consider paying their credit card bills with another credit card when they have a tower of continuously growing bills. This is probably a good choice.
Since credit cards have a high rate of interest, the bills seem to be never-ending. Sometimes, the situations get so worse that you can also face problems in paying the minimum due amount. This keeps increasing the outstanding amount, and you find yourself in a credit card debt.
So, if your credit card bill exceeds 40% of your monthly income, then you should go for paying your credit card bill using another credit card (with a lower rate of interest).
3) Too Many Pending Credit Card Bills
When people fail to keep a track of their credit card expenditures and due payments, they often find themselves in situations where there are a number of pending credit card bills.
The rising interest in these bills makes it difficult to make complete payments. Therefore, when you find yourself in a similar position, you can think of paying these credit card bills with another credit card.
This will help you gather your bills into one card which you can pay with time. Try to use a card with the lowest rate of interest.
Things to Keep in Mind When Paying Credit Card Bill With Another Credit Card
Although it seems like an easy and efficient method to pay your credit card bills through another credit card, there are three important factors that you must keep in mind, before paying your credit card bill using another credit card.
1) Fee and Additional Charges.
Even if paying a credit card bill through another credit card reduces the rate of interest and takes off the burden of a piling credit card debt, it doesn’t come for free.
Be it a balance transfer or a cash advance, you will have to pay an additional fee on the transferred or withdrawn money.
2) Credit Report
Your payment history covers 30% of your credit report. When you make balance transfers or cash withdrawals from your credit card, it doesn’t look good on your report, and will eventually affect your CIBIL score.
That is why you must not pay your credit card bill through another credit card frequently.
3) Maintaining Payments
Once you pay off a credit card debt using another credit card, then you must ensure that you are making regular payments. Else, you are likely to find yourself in another credit card debt with piling interests.
Pay Your Credit Card Bill
Pending credit card bills do not reflect well on your credit report. Even if you are facing financial issues, it is better to pay your credit card bill with another credit card with a lower interest rate.
This will not only get rid of the debt and increase your CIBIL score, but it will also help you reduce the rate of interest on your credit card bill, thus reducing the minimum due payment and making it easy for you to pay your bill on time.