Is It Smart to Pay Off a Credit Card With Another Credit Card?

5 min read


You might be asking yourself, “Is it smart to pay off credit card debt using another credit card?”

The short answer is that it depends. For the most part, you can't pay off an old credit card balance with a new one. You cannot pay off your credit card debt with a bank using another credit card. There are just three acceptable methods of payment: cheque, wire transfer, or money order.

The one and only exception to this rule is making use of a credit card that allows transfers of existing balances. With one exception, which will be discussed below, you cannot use one credit card to pay off another.

Related: Should I Stop Investing to Pay Off Credit Card Debt?

Transferring a balance from one high-interest credit card to another with the same interest rate is not a good idea. 

Moving a balance from a credit card with a high interest rate to one with 0% interest for an extended period of time, on the other hand, may be a good idea if it helps you pay off your debt faster and saves you money on interest.

The concept is based on the fact that there is a three to four percent fee associated with transferring a credit card balance from one card to another. This will make it possible for you to pay off your debt without having to pay any interest. Because of this, there are credit cards that don't charge interest for the first 12, 18, or even 24 months. This is how long you want it to take to pay off all of your debt. 

TIP: It's not a good plan if you don't think you can carry it out. But getting a no-interest card could help you and save you hundreds or even thousands of dollars in interest that you might have to pay on your high-interest card if you don't pay it off in 12 or 18 months.

Why You Should Not Pay a Credit Card With a Credit Card

As previously stated, unless you initiate a balance transfer, you cannot pay your credit card bill by charging it to another card. But even if it were allowed, it is a risky way to try to pay off one type of debt by taking on more debt in another. As a result, your debt levels may become unmanageable, negatively impacting your credit score and overall financial stability.

What Is a Balance Transfer?

Paying off a credit card balance in this manner only makes financial sense if you are transferring the balance to a card with a lower interest rate, especially an introductory 0% APR offer. Using one credit card to pay off another is only possible through a process called a balance transfer.

You can save money by transferring a balance from an interest-bearing card to a card offering a 0% APR promotional rate for a set period of time. 

Here’s why: 

Let’s say, you have a $10,000 credit card balance with an APR of 18%. Approximately $916.80 per month would be needed to pay off the balance in a year, with a total interest cost of around $1,001.60. To avoid paying interest on the transferred balance for an entire year, you could consider transferring it to a credit card that offers a promotional 0% APR for the first 12 months. However, there are some nuances to the process. 

Are There Any Benefits to Making a Balance Transfer?

Balance transfers can be an effective tool for some people in their efforts to reduce their debt load, but they are not the best option for everyone. Let us weigh the benefits and drawbacks of balance transfers:


- The 0% interest offer. The primary advantage of a 0% balance transfer credit card is the introductory APR offer. This no-interest period means that your monthly payments will be applied entirely to the principal balance during the promotional period.

- Consolidating your debts by transferring the balances to a single balance transfer credit card will simplify your monthly budget.

- Reduce your credit utilization. A balance transfer increases your total credit by the amount of credit on the new balance transfer card. Assuming you don't incur any new debt, your utilization rate will decrease as you make payments.


- Balance transfer fee. There is typically a balance transfer fee associated with switching credit cards. The charge is a percentage of the total money being transferred and can be as little as 0% or as high as 5% or more.

- Ongoing APR. If the transferred balance is not paid in full by the end of the promotional period, the usual purchase APR will apply (which could be greater than the purchase APR on the card you're moving from).

- Credit checks. Credit scoring formulas take into account recent credit application submissions. While a single new credit card application is unlikely to significantly lower a score, applying for multiple new credit lines can.

Balance Transfers: How to Make One

Making a balance transfer involves a few simple stepson your part. Before doing anything else, you should take a look at your current debt and interest rates. The next step is to figure out what exactly it is you want to accomplish. You should weigh the pros and cons of transferring your balances to a card with a promotional 0% APR offer versus a card with a low ongoing interest rate when looking to consolidate your high-interest debt. Make sure the credit card you choose gives you at least enough time to pay off your balance in full.

When comparing different offers, keep the terms of a transfer in mind. When deciding which balance transfer card is best for you, make sure to factor in any balance transfer fees. Once you've decided on a credit card, you can usually request a balance transfer during the online application process. You'll need to know the account number from which you want to transfer debt. Otherwise, the application process is identical to that of any other new card.

What to Think About Before Making a Balance Transfer Payment

Balance transfer offers are not a one-size-fits-all solution to paying off a credit card. There are some things to keep in mind: 

1) Balance Transfer Fees

Balance transfer fees typically range from 3% to 5% of the transferred amount. If you transfer $10,000 to a card with a 0% APR offer but a 3% balance transfer fee, you will incur an additional $300 in debt. It might make sense to select a card with the lowest balance transfer fees.

However, even if you must pay a balance transfer fee, it may still help you save money in the long run depending on how much debt you have, the interest rate on your credit card, and how long it takes to pay off your debt. Before making a decision, it's always a good idea to do the math for your specific situation.

Continuing from the previous example, paying a $300 balance transfer fee rather than over $1,000 in interest charges could save you more than $700. Simply follow a disciplined repayment plan to zero out your balance before the intro period expires, or you'll be charged interest on any remaining balance at the regular APR.

2) Credit Cards from the Same Bank Cannot Be Used to Make a Payment

Banks make money when you pay interest and other fees, so they generally will not let you pay off one card with another from the same bank. If you want to take advantage of a balance transfer offer, you should transfer the balance from one bank-issued card to one with a 0% APR offer from a different issuing bank.

To get around this rule, you can use the balance transfer offer to fund your checking account and then use the funds from your checking account to settle your credit card balance.

3) It Is Important That You Have a Good Credit Rating

Although a balance transfer offer can help you get a head start on paying off your existing debt, the best balance transfer offers are usually reserved for those with the best credit. If you are new to credit or have a poor credit history, you may not be eligible for a balance transfer card. Even those with excellent credit should be aware that applying for a new line of credit can lower your credit score.

Source: Vincere Wealth

Related: How Do I Improve My Credit Score?

4) The 0% Interest Period Will End

The promotional interest-free period will end at some point. If you haven't made much progress toward paying off your debt, you may find yourself paying an even higher ongoing interest rate. Before transferring a balance to a new card, make sure you can pay it off within the 0% APR period.

5) You Won’t Know How Much Credit You’ll Receive

There's no assurance that you'll be granted a new card with a limit of $10,000, even if you're trying to transfer debt. If you need more time to pay off your debt than the amount you're approved for, you'll have to keep track of and make payments on two credit card balances instead of one.

What is a Balance Transfer and Do I Need One?

You can transfer debt from one account to another using a balance transfer. Why would you do one? Because transferring high-interest debt to a credit card with a 0% APR can result in significant savings.

Vincere's Key Takeaways:

- Balance transfers can help you save money on interest charges.

- Balance transfers work by first applying for a new card with a low introductory APR, then initiating a balance transfer and paying off the balance.

Remember: Some credit cards are suitable for balance transfers, while others are not.

A balance transfer is a type of credit card transaction that involves the transfer of debt from one account to another. If done strategically, those paying down high-interest debt can save significantly on interest charges. Debt transferred to a credit card with a 0% introductory APR offer on balance transfers, for example, could potentially be paid off interest-free.

Balance transfers, however, have some costs and limitations. A balance transfer fee of 3% to 5% of the total transferred is usually required. Furthermore, if the balance transfer card's limit is low, you may not be able to transfer your entire balance.

How Balance Transfers Work:

While the exact process for balance transfers varies greatly, the following steps are generally required when working with major issuers:

1. Apply for a card with an introductory 0% APR on balance transfers or use an offer on an existing card. To be eligible for the best deals, you usually need to have good or excellent credit (typically, FICO scores of at least 690). Keep in mind that same-issuer transfers are generally not permitted. For example, if you want to transfer a balance from one Citi card to another, you can't.

2. Begin the balance transfer. If you do this over the phone or online, you'll need to provide information about the debt you want to transfer, such as the issuer's name, the amount of debt, and the account information.

Balance transfers can also be initiated using convenience checks or checks sent to you in the mail. However, before using one, read the terms to determine whether it will count as a balance transfer and what your interest rate will be.

3. Wait for the transfer to complete. The issuer will generally pay off your old account directly once the balance transfer is approved, which could take two weeks or longer. That old balance, plus the balance transfer fee, will be transferred to your new account.

4. Pay down the balance. You will be responsible for making monthly payments on that account once the balance is transferred to the new card. And if you pay it off during the introductory 0% APR period, you could potentially save a lot of money.

The Top Balance Transfer Cards

If you think a balance transfer card is right for you, here is a list of the best balance transfer cards to suit a variety of needs.

Here are some suggestions to help you get started:

U.S. Bank Visa® Platinum Card which carries an annual fee of $0 and comes with a 0% intro APR on purchases and balance transfers for 18 billing cycles, followed by a variable APR of 18.74% - 28.74%. A balance transfer fee of either 3% or $5 applies, whichever is greater. 

Note: Rising interest rates are anticipated to continue. If you have credit card debt with a variable interest rate, your interest rate will increase, making it more difficult to get out of debt. A 0% balance transfer credit card can help stop the bleeding for a bit! 

Citi® Double Cash Card* which carries an annual fee of $0 and comes with a 0% intro APR on balance transfers for 18 months. After that, the standard variable APR will be 18.24% - 28.24%, based on creditworthiness. There is also an intro balance transfer fee of either $5 or 3% of the amount of each transfer, whichever is greater, completed within the first 4 months of account opening. After that, the fee will be 5% of each transfer (minimum $5).

Citi® Diamond Preferred® Card* which carries an annual fee of $0 and comes with a 0% intro APR for 21 months on eligible balance transfers from date of first transfer and 0% intro APR for 12 months on purchases from date of account opening. After that, the variable APR will be 17.24% - 27.99%. Balance transfers must be completed within 4 months of account opening. A balance transfer fee of either $5 or 5% of the amount of each transfer, whichever is greater, applies.

Related: First Credit Card? | How to Choose? 

Possible Substitutes for Balance Transfers

There are other methods for dealing with debt, but a balance transfer credit card can be convenient. Balance transfers are unnecessary if you can pay off your debt in full. On the other hand, if you do not happen to be sitting on a large sum of money, you could always look into getting a personal loan.

There are circumstances in which a personal loan may be preferable to a balance transfer. To begin with, their ongoing interest rates are typically more reasonable than those of credit cards. 

Personal loans are typically issued as a lump sum payment, which can then be used to repay the credit card company and the loan lender in equal monthly installments. This can have a beneficial effect on your credit score by reducing your debt-to-credit-limit ratio. It is important to remember, though, that if your credit is not stellar, you probably would not be approved for a personal loan at a favorable interest rate.

Avoid Getting a Cash Advance on a Credit Card

Technically, it is possible to pay off a credit card with a cash advance from another card, but this is not a good idea. When you borrow money against your line of credit, the interest rate is typically much higher than the APR on your credit card purchases. Some cards may also charge a service fee ranging from 3% to 5% of the withdrawal amount. Furthermore, if you withdraw cash from an ATM, you will almost certainly be charged fees.

The Consequences of Credit Card Default

1) If you do not pay your credit card bill, you risk having your account become delinquent, which will hurt your credit score. The average grace period extended by credit card companies before reporting late payments to credit bureaus is 30 days.

2) If payments are not made after a certain amount of time (this varies by issuer), the account may be frozen or closed. Sending your account to collections is the next step, and that action can stay on your credit report for as long as seven years.

3) If you are having trouble keeping up with your credit card payments, it is in your best interest to contact your creditors as soon as possible to inform them of the situation and negotiate a new payment plan, if possible.

Useful Resources: How to Prioritize Your Financial Goals?

How to Improve Your Mindset Around Money?


You cannot just transfer the balance from one credit card to another, but a balance transfer offer could help you reduce your overall credit card debt. Consider the benefits and drawbacks carefully before jumping at the chance to sign up for a new card with a 0% APR introductory period. Even if you have exhausted all other options, like a balance transfer, taking a cash advance on your credit card is never a good idea.

I hope this information was helpful. If you have any questions, feel free to reach out. I’d be happy to chat with you. 

Connect with Renee

About the Author

Renee helps clients make sound financial decisions in her role as a Financial Planner at Vincere Wealth. Having a trusted advisor steer you toward wise choices now can have a major impact on your financial future. Renee is especially proud of her work educating and empowering women in the areas of personal finance, budgeting, and debt management.

If you're interested in an investment advisory or financial planning relationship, please consider Vincere Wealth Management.

Schedule a FREE 1:1 session here to connect with a #VincereWealth Advisor. 

Disclosure: This post is just for informational purposes and is not meant to be legal, financial, business, or tax advice. Regarding the matters discussed in this post, each individual should consult his or her own financial advisor, or tax advisor. Vincere accepts no responsibility for actions taken in reliance on the information contained in this document.

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