Paying Off a Credit Card Statement With Another Credit Card: What You Need to Know

Q: Can I pay off a credit card with a credit card?

Yes. Using a balance transfer is the least expensive way to do so, but you can also do so by taking out a cash advance.

Q: Does paying off a credit card with a credit card have a fee?

Credit cards that offer 0% APR promotional financing for balance transfers generally charge a fee of 3% or 5% of the amount transferred. While there are some credit cards that don’t have a balance transfer fee, these cards usually don’t offer a special introductory rate.

Q: Will paying off a credit card with a credit card affect my credit score?

It probably won’t have much effect, since your outstanding debt will remain the same. But if you open a new credit card, then your debt-to-credit ratio will decline, for a given amount of debt, which will help your credit score. And if you’re able to pay down your balance, it can improve your credit score. That’s because the amount you owe is one of the factors that affect your credit score.

Paying Credit Card Debt With a Credit Card

Jason SteeleUpdated March 25, 2022

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Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.

There are several reasons why you might be thinking about whether you can pay off a credit card with another credit card card. For instance, you might be wondering if you can do this to earn more rewards, or you may wish to transfer your debt to an account with a lower interest rate. It is possible to do, and we’ll walk you through the ways you can pay a credit card with a credit card, as well as each method’s pros and cons.

Methods of Paying off Credit Card Debt With a Credit Card

There are two primary ways that you can pay off your credit card debt by using another credit card: with cash from a cash advance and with a balance transfer.

With Cash

Any time you use your credit card to get money from an ATM, it’s called a cash advance, one of numerous credit card terms to know. You can then use that cash to pay off any kind of debt, including credit card debt. Plus, you can receive a credit card cash advance from nearly any ATM, making this option readily accessible.However, a cash advance is an extremely costly way to pay your credit card bill. Cash advances are typically subject to a higher cash advance APR, or interest rate, than the standard credit card interest rate. It’s common to have a credit card charge a 25% to 30% APR on cash advances.Further, most credit cards impose a cash advance fee, which is often either $10 or 5% of the amount of each transaction, whichever is greater. Also, cash advances have no grace period (a critical part of how credit cards function), so you can’t avoid interest charges by paying your balance in full.

Pros and Cons of Cash Advances

Credit card cash advances have numerous drawbacks, and few advantages. While a cash advance is an option to get funds to pay off debt — and a readily accessible one at that, given you can generally get a cash advance from most ATMs — they aren’t inexpensive. You’ll face a higher cash advance APR, plus costly cash advance fees.And then you also won’t enjoy an interest-free grace period like you usually would with credit card purchases.

Pros of Cash Advances	Cons of Cash Advances
Can access cash from an ATM	High cash advance APR
Can use funds to pay off any debt	Expensive cash advance fees
	No interest-free grace period

By a Balance Transfer

Another option to pay off your credit card with another credit card is with a balance transfer. When you request a balance transfer, the card issuer will pay off the balance of another issuer’s credit card, and add that amount to the balance of the card it issued. (Before you do so, make sure to check your credit card statement balance to see if you have enough available credit to pay it off.) Most credit card issuers will also impose a balance transfer fee of 3% or 5%. However, there are some cards that don’t charge a balance transfer fee. There are also credit cards that offer new applicants 0% APR financing on balance transfers, for a limited time. By law, these promotional financing offers must last at least six months, but there are some cards that offer up to 21 months of interest-free financing.Because of the way credit card payments work, the balance with the highest interest rate is paid off first, so your payments will go to any new charges that are at the standard interest rate, before paying off the balance transferred at a 0% APR rate.

Pros and Cons of Balance Transfers

Credit card balance transfers offer several advantages and disadvantages. On the positive side, they’re a quick and simple way to move your balance from one card to another. Credit card balance transfers to new accounts can sometimes offer 0% APR financing. Also, credit card balance transfers can consolidate your debt, making it easier to make your payments.The disadvantage is that most transfers will incur a fee. Also, repeatedly making balance transfers can be a way for some cardholders to simply postpone paying off their debt, rather than to facilitate getting it paid off. Additionally, you may not qualify for a credit card with interest-free financing on balance transfers if you don’t have good or excellent credit (and given credit usage is one of the factors that affect your credit score, that may not be your current financial reality).

Pros of Balance Transfers	Cons of Balance Transfers
Quick and simple to move your balance from one card to another	Usually involves a fee of 3% or 5% of the amount transferred
Can offer 0% APR financing	Can be used by some cardholders as a way to postpone paying off their debt

Alternatives to Paying off Credit Card Debt

Now that you understand two different ways to use a credit card to pay off credit card debt, it’s important to consider your alternatives as well. Consider how the above options compare to other ways you can pay off credit card debt.

Credit Counseling

A non-profit credit counseling agency is one option to explore if you’re trying to deal with your credit card debt. These agencies can offer you free financial advice, including tips on paying off credit card debt and guidance on what your debt payoff options may be. Services can be available over the phone, anywhere in the country.

Debt Consolidation

Debt consolidation loans are personal loans that you can use to combine many balances into one. At the same time, a debt consolidation loan may offer you a lower interest rate than what you are paying on your credit cards. This can make it easier to stay on top of your payments and pay them off faster.

Peer-to-Peer Loan

Peer-to-peer loans are offered by individual creditors through peer-to-peer lending services, such as Peerform, Upstart, and Prosper, that connect qualified applicants to investors. You can then use these loans to consolidate and pay off credit card debt. Each service will set its own rates and terms, with varying loan amounts offered.

Payday Loan

Payday loans are short-term personal loans that are offered with the intent of repayment once borrowers receive their paychecks. However, these loans can have very high interest rates and fees. This can make it easy to get caught in a debt trap when you’re already trying to escape your credit card debt.

Debt Management Program

Debt management plans can be created by credit counselors to help consumers consolidate and pay off their debts. These monthly payment plans can last from three to five years. Be aware that you likely can’t open new lines of credit throughout the duration of your plan.

Bankruptcy

As a last resort, you can file for bankruptcy in order to shield some of your income and assets from creditors. There are several types of bankruptcy for different financial situations. Consult an attorney to see if one is right for you.

Compare Credit Card Options With Lantern

Credit cards can serve as a powerful financial tool — but they can also harm your finances and credit score if not used responsibly. If you do find yourself buried in a mound of credit card debt, you can pay a credit card with a credit card, though there are other options to consider as well. Once your debt is settled, you can get back on track with your credit card usage and perhaps work to improve your credit score from any damage that was done.A big part of ensuring responsible credit card use is finding a credit card that suits your needs and lifestyle. Lantern by SoFi makes it easy to compare credit cards, so you can see the options that may be available to you.

Frequently Asked Questions

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

Does paying off a credit card with a credit card have a fee?

Will paying off a credit card with a credit card affect my credit score?

Photo credit: iStock/Poike

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About the Author

Jason Steele

Jason Steele has been writing about credit cards and award travel since 2008. One of the nation's leading experts in this field, he has contributed to dozens of personal finance and travel outlets and has been widely quoted in the mainstream media.

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