Open A Card From A Different Issuer
Balance transfers can’t be completed between cards from the same issuer, so you’ll need to check that the cards with debt differ from the balance transfer card you plan to open.
Be careful with debt on co-branded cards, since those cards may not have the issuer present in the card’s name. You’ll need to verify the issuer by checking your cardholder agreement, calling customer service or searching online.
For instance, if you have debt on a Citi card you can’t transfer debt to another Citi card. And if you’re looking to transfer debt from both a Citi card and a Discover card, opt for a balance transfer card that isn’t from either of those issuers, such as cards from Amex, Wells Fargo, Chase and Bank of America.
You Can Use One Credit Card To Pay Off Another
Although you can do it, you wont be able to do it directly. Most credit card issuers wont allow you to just punch in another credit card number online to make your payment. However, you can always take a cash advance from your credit card. All you need to do is find an ATM. Afterwards, you can use the money to pay off your other card.
But be aware that taking out a cash advance is not the same as shopping. Cash advances carry a much higher interest rate. Using this method to pay off your credit card can hurt you if youre not careful and if you dont pay back everything that you owe. You might want to consider cash advances as a last resort.
Know How Much You Owe
When debt starts piling up, it is often easier to ignore what you owe than to crunch the numbers. However, the first step to getting out of debt is having an amount in black and white. So, sit down with all of your billscar loan, medical bills, credit cards, etc. Make a list of what you currently owe for each bill. Make sure you note any interest rates that will be added on as wellthese are an important factor in paying off your debt.;
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They Can Save You Money
If you can find the right deal, transferring your balance could save you a lot of money in the long run. Some credit issuers may offer you a better APR rate compared to whats being applied to your current balance. Lower interest rates mean you can save money as you begin to pay off your balance. This, coupled with interest-free introductory periods, makes a balance transfer a potentially useful option when looking to address high amounts of credit card debt.;
Using A Balance Transfer Credit Card
Opening a new credit card when you already have credit card debt seems counterintuitive. But a balance transfer credit card can actually help you as long as you use it correctly.
For those who qualify, using a balance transfer card is the most active approach to paying off your credit card debt because it involves moving your debt to a card with a zero-interest period. Balance transfer cards offer an introductory 0% APR period that typically range from six months to up to two years. Your credit score determines the amount of debt you can transfer .
To use balance transfer cards correctly, you need to make sure you pay off your debt within that zero-interest time frame; otherwise, you’ll face interest charges. You will most likely need to have good or excellent credit to qualify for the longer interest-free periods, but there are options available for fair credit as well. There are some balance transfer cards with no fee, but most usually require a 2% to 5% balance transfer fee .
Below are some of CNBC Select’s picks for the top balance transfer credit cards.
- Best for Fair Credit:Aspire Platinum Mastercard®
Note that because of the recent economic fallout from the coronavirus, credit card issuers and lenders are tightening requirements so it is harder to get a zero-interest balance transfer offer.
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How To Do A Balance Transfer
Once youve decided on a balance transfer card, you will need to put in your application for the card, either in-person, on the phone or online. After the card has been approved, your next step will be to get your balance transferred to the new card. While different card issuers have their own policies for how to do this, generally you can make a transfer by phone or online.
Be aware that certain issuers have a time limit for when you can transfer a balance. For example, Citi requires transfers to be completed within the first four months of opening an account in order to be eligible for the intro APR. In order to make the transfer, you will need to have your account numbers, current balance information and banking information on hand. And keep in mind that balance transfers may take some time to process. While your balance transfer is in progress, youll need to make sure youre keeping up with your regular payments on your old account. Once the transfer is complete, follow up to make sure that your balance for the old account is $0.;;
What To Look Out For With Balance Transfer Cards
If you do apply for a new balance transfer card, make sure youre confident in your approval odds so you dont need to apply for too many cards at once. Each time the credit bureaus check your credit, it shows up on your credit report as a hard inquiry and can have a temporary negative effect on your score. Also, be aware that credit cards particularly balance transfer cards are not always easy to qualify for. During the pandemic, many card issuers tightened the requirements for approval on new credit.
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Can I Use One Credit Card To Pay Off Another
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Can You Pay One Credit Card With Another How
While you can pay one credit card with another, you need to do it in such a way that it doesnt end up costing you more in the long run. There are several different methods for doing this type of transaction. You may have noticed that when paying your credit card bill there is no way to pay your credit card with another credit card. That would be too easy! First, lets look at the easiest way for you to pay off a credit card bill, using the resources from another credit card.
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How To Use A Balance Transfer Card To Pay Off Credit Card Debt
Balance transfer cards offer you the option to transfer debt and pay it down during an introductory interest-free period. To get the most out of using a balance transfer card, look for cards that have no annual fees and offer cash back rewards.
If your credit is good, the Citi® Double Cash Card could be an option. It offers a 0 percent intro APR on balance transfers for 18 months. After that, the variable APR will be 13.99 percent to 23.99 percent based on your creditworthiness. The card rewards are 1 percent cash back on any new purchases and another 1 percent back as you pay those purchases off.
If your credit score is less than good, but you still want to try a balance transfer, a card like the Discover it® Secured is an option. It has a 3 percent introductory balance transfer fee, up to 5 percent fee on future balance transfers *. The intro balance transfer APR is 10.99 percent for six months from the date of the first transfer .;
How Can You Pay A Credit Card With Another Credit Card
First things first; lets talk about logistics. Whether its a good idea or not, the fact remains that, yes, you can pay off one credit card with another credit card.
The easiest way to do this is to take out;a cash advance with one of your credit cards. Once you take out a cash advance online or at an ATM, you can use that cash to pay off your other credit card bill. If you dont want to take out a cash advance, you can also use those handy convenience checks your card issuer sends in the mail. By writing a check to yourself and cashing it, youll gain access to the money you need to pay your other bills.
While both of these options are easy, the costs involved should give you pause. For starters, youll generally pay at least 3% to ;5% of your cash advance amount as an upfront fee. If your cash advance is for $500, for example, youll pay up to $25 the moment you get access to your cash. Second, unlike when you use your card at a store, theres typically no grace period on a cash advance, so their interest charges start adding up;immediately. Growing the balance on your original card by taking out a cash advance will lead to higher interest charges over time. So if your interest rate is relatively high, $500 in new debt could cost you hundreds more over the years.
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Ask Yourself Which Card Charges The Most
While credit card debt can be overwhelming especially when you have a balance on multiple cards there are some tried and true methods that can help you pay debt off as quickly as possible.;
As a first step, find out how much each card charges in interest, expressed as APR, or annual percentage rate, says Alicia R. Hudnett Reiss, certified financial planner and founder of Business of Your Life, a Washington, D.C-based financial planning service.
Then you can use a debt payoff calculator to determine which credit card balance is costing you the most. Write down each of your cards total balances, interest rates, and monthly payments; then you can use the calculator to see how much of your payment goes toward interest versus your principal balance.
For example, plugging in the below figures into this calculator:
- 18% APR
- $75 goes towards interest, and only $25 goes towards the principal balance.;
- The total interest paid will be $4,311.18
- It will take 7.8 years to pay off the balance
Most people dont actually look at the interest rate on their cards, says Hudnett Reiss. Often, people charge purchases to credit cards to spread the cost out over a few months, without realizing that costs can balloon as the balance sits unpaid and accrues interest.
Pay Your Credit Card Bill From Another Bank
Are you still old-fashioned when it comes to paying your credit card bills? Visiting the bank and waiting in queues? Well, youre due for an upgrade and this article explains how you can pay your credit card bill from another bank using net banking.
It is advisable to use this payment option if there are at least a few working days left before the due date.;In case of an immediate payment requirement, you may want to check with the receiving bank before making a payment.
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Using A Credit Card To Pay Medical Bills
Medical bills can be overwhelmingly expensive, especially if you’re uninsured. If you’re having trouble paying your medical bills, negotiate an agreement with the hospital or other company to whom you owe money. Don’t add to your bills and stress by adding exorbitant credit card interest rates onto them. You should also go;through your medical bills a second or third time, making;sure they are accurate and;you understand all the charges.;
Options For Paying Off One Credit Card With Another
There are several ways to pay off one credit card with another .
One option is to take a cash advance from Card B and then use the cash to make a payment to Card A. However, watch out for;cash advance fees; and possibly a higher interest rate, which also may start accruing from the day you take the cash advance.
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Rob Peter To Pay Paul
If youre currently having serious income issues and the money just isnt there then you could start using your credit card to pay for all your daily needs and then use any cash you have to pay for your credit cards. Again this is obviously not an ideal option and could potentially ruin your finances, but if youre in a serious bind it could work for a short period of time. Heres the end game, if you try this option then you need to be looking for other ways to get more money right away. This, like all these options, is not sustainable for a long period of time.
After You Get A Cash Advance: Yes But Not A Wise Option
It is possible for you to use your credit card to obtain cash by using an ATM and then make use of these funds to pay off the debt on another credit card. However, such transactions i.e., the cash advance, typically comes at high fees and charges and high-interest rates too. This makes it an extremely expensive method to obtain cash.
It is definitely not the way one should go if earning maximum rewards is one of the goals. Cash advances typically do not earn rewards. And in some cases, even if they did, the high charges associated with it and the high rates of interest on them would exceed any value of benefits that one might be earning on the credit card.
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Is Credit Card Kiting A Crime
Credit card kiting is not a crime as long as you have the intention to pay your debts. Proving lack of intent is hard, which is why its very rare for someone to get charged with fraud for credit card kiting. However, it is possible. If prosecutors can prove you made a false representation and had no intention of repaying the debt, it can be considered fraud. For example, in Eashai vs. Citibank, a bankruptcy court found that Eashai couldnt discharge his debt with Citibank by filing for bankruptcy because he had no intention to pay off his debt when he engaged in credit card kiting, which make it fraud.
Even though credit card kiting may be an appealing quick fix for your financial troubles, it comes with huge risks. These include:
When You Are Opting For A Balance Transfer: Yes
You can actually end up saving money on the rates of interest when you move debt from a that has a high-interest rate to a credit card that might be offering the 0% APR for a set introductory period or probably a low-interest rate for the balance transfer facility, and then paying off your balance for an overall lower rate.
There are different balance transfer fees charged by the different providers. These transfers are not immediate either they can actually go up to taking weeks to get through. Also, you generally do not earn any rewards on them.
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Balance Transfers Are A Good First Step To Paying Off High Credit Card Balances
Eric is currently a duly licensed Independent Insurance Broker licensed in Life, Health, Property, and Casualty insurance.;He has worked more than 13 years in both public and private accounting jobs and more than four years licensed as an insurance producer.;His background in tax accounting has served as a solid base supporting his current book of business.
Racking up credit card debt is a slippery slope. While there are a lot of conventional solutions to handling large amounts of debt, its important not to rule out other methods. Oftentimes, by exploring new options, you can find a better solution to your credit card debt dilemma.;
Key takeaways:
- Balance transfers, which can be used to move debt from one card to another with a lower interest rate, can be a good option for individuals with high credit card debt.;
- Cash advances are another option where consumers can take out cash against another line of credit and use that money to pay off an existing credit card.;
- Neither of these strategies is a substitute for healthy financial planning and management, and they may not address overall problems with credit card debt.;
Keep Your Options Open
Balance transfer cards are helpful tools, but they arent for everyone. If your credit is not in a good place to add another card to your rotation, you may want to look at other options. A personal loan is another way to get some debt relief at a lower interest rate. You can also look at the option of going through a debt management service to help you negotiate payment options with your creditors.
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