Check Your Credit Before Applying For A New Credit Card
If you’re thinking about applying for a balance transfer credit card to get an introductory 0% APR, it’s important to note that these cards typically require good or excellent credit to get approved.
According to credit scoring company FICO, that typically means a credit score of 670 or above. Check your credit score to get an idea of where you stand, and if your credit history needs some work, take the time to improve your credit before you apply. Also, consider using Experian CreditMatch to get personalized card offers based on your credit profile.
Minority Serving Institutions Meaning And Cultural Impact
Minority serving institutions, or MSIs, are colleges and universities dedicated to serving students from underrepresented groups. These institutions include not only HBCUs but also TCUs, HSIs and AANAPISIs. They enroll over five million students nationwide.
An American Council for Education analysis found that MSIs are key to providing affordable access to higher education for students of color. Many of these students come from low-income backgrounds and are first-generation college students.
Plus, these institutions contribute to underrepresented students social and economic mobility by letting them move into the upper-middle class at a higher rate than non-MSIs.
MSIs play a critical role for students of color. For example, HSIs educate over 65 percent of all Hispanics in higher education. HSIs also enroll a large number of black and Native students, says Deborah A. Santiago, CEO and co-founder of Excelencia in Education.
Effective MSIs bring an asset-based approach to serving students and are intentional in ensuring students of color are included in the practices that can advance the students success, she adds.
Rule #: Understand How Interest Is Calculated
Contrary to popular belief, interest isn’t calculated based on the remaining balance after making a minimum payment. In reality, issuers calculate interest based on your average daily balance, calculated by taking your card’s APR and dividing this number by 365.
For example, assume you have a statement balance of $1,000 and make a payment of $800 on the due date. You’ll be charged interest on the remaining balance of $200 and lose your grace period. In the new billing cycle, any transactions will begin accruing interest immediately. The grace period where no interest is charged only applies if you pay your balance in full by the payment date.
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Make At Least The Minimum Payment
Make at least the minimum payment if you cant pay off your balance in full. The minimum payment is the minimum amount you have to pay each month on your credit card balance.
Your minimum payment will be either:
- a flat dollar amount, usually $10, plus any interest and fees
- the higher of a dollar amount, typically $10, or a percentage of your outstanding balance, typically 3%
Your credit agreement will tell you which method your credit card issuer will use to calculate your minimum payment.
Paying only the minimum amount you owe means:
- it will take you longer to pay off your credit card balance
- youll pay more interest
Increasing your monthly payment by even a small amount will shorten the time it will take you to pay off your balance by a lot.
Since August 1, 2022, the credit card minimum payment for Quebec residents is 3.5%. The rate will increase by 0.5% until it reaches 5% in 2025.
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Ways To Pay Your Credit Card Bill
Depending on how your credit card issuer accepts payments, you may have several options to choose from. Here are some of the common ways issuers let you pay your credit card bill:
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For Direct Monthly Payments: No
Paying monthly credit card bills with different credit cards generally isn’t an option. Don’t expect to earn easy points and miles in a never-ending cycle or quickly buy yourself more time to pay off debt this way.
In part, these restrictions exist because issuers want to limit their risk. A customer who pays one credit card with another may be more likely to default on payments.
How To Avoid The Need To Make A Credit Card Payment With Another Credit Card
When you use one credit card to pay off another, youll incur additional interest and fees. Instead of making a credit card payment with another credit card, it may be a better idea to develop a financial plan that lets you save cash for an emergency, and helps align your credit card spending to fit your budget.
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Why You Should Not Pay A Credit Card With A Credit Card
You shouldnt pay off a credit card with a credit card because it simply isnt possible . Credit card issuers tend to only accept the following types of payment when you pay your bill each month: checks, electronic bank transfers and money orders. While this may be disappointing for some, using a credit card to address out-of-control debt on another credit card is only going to cause more issues. Your debt will become unmanageable and odds are you are going to be facing high-interest charges on your new credit card much like the first credit card.
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 bills car 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 well these are an important factor in paying off your debt.
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Alternatives To Paying One Credit Card With Another Card
Using credit to pay monthly credit obligations is generally not a good idea. Using credit cards to make payments only moves money around, which can mire you further into debt.
Instead of using a cash advance or balance transfer to cover monthly credit card payments, consider these five alternatives.
Final Thoughts On Using One Credit Card To Pay Another
While balance transfers and cash advances can both be short-term solutions to paying off credit card debt, they are not a replacement for healthy financial planning and management as they both come with long-term risks. The best way to pay down credit card debt and build a healthy credit score, after all, is by making timely payments every month of at least the minimum amount due. However, if you do choose to explore one of these options to pay off your credit card bill, its important to do your homework first and weigh the pros and cons based on your financial situation before committing to them.
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They Consider Your Credit
A balance transfer card is just like any other credit card its just called that because it has features like low APR or low fees that make it attractive for balance transfers.
So when you apply for a balance transfer card, the card issuer will perform a hard inquiry on your credit reports to see if you qualify. For the best balance transfer cards, youll need strong to get approved.
If you have bad credit, unfortunately, you might not qualify for any balance transfer offers in which case youll have to try one of the alternatives mentioned below.
Also worth noting: Balance transfer cards come with a credit limit thats based on your creditworthiness. In some cases, this new credit limit wont be big enough for you to transfer your full credit card balance from your original card. Some issuers may also set limits on how much debt can be transferred.
William Drake Wallethub Analyst
@will_drake07/12/21 This answer was first published on 07/12/21. For the most current information about a financial product, you should always check and confirm accuracy with the offering financial institution. Editorial and user-generated content is not provided, reviewed or endorsed by any company.
Nope. Credit card companies dont let you do that because it would mean paying off debt with more debt. Sorry to break the bad news!
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When To Pay Your Credit Card Bill
Every credit card has a billing cycle that typically lasts about a month. At the end of the billing cycle, your credit card issuer will send you a statement that lists your account activity, the minimum payment due and a due date. And that due date will be the same date every month.
Paying your bill on time can also have a positive impact on two areas that affect your credit scores:
- Payment history: Making on-time payments shows responsible credit card use and may help you improve your credit.
- Another factor that impacts your credit scores is your , which measures how much credit youâre using. Paying down your balance may help you improve your credit score because it lowers your utilization ratio. Paying off your entire balance lowers that ratio even more and can help you avoid paying .
Every card issuer has its own reporting schedule, so itâs best to ask your issuer about its practices. If you can find out when your card issuer reports your account activity, consider making at least a minimum payment before itâs reported as late.
Find Your Minimum Payment Due
The minimum payment is the minimum amount you must pay towards your Apple Card balance to keep your account current.
When your minimum payment is due, Payment Due appears with the amount below your Apple Card. If you bought an iPhone, iPad, Mac, or other eligible Apple product with Apple Card Monthly Installments, your monthly installment is included in the minimum payment amount.
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Should You Pay Off A Credit Card With Another
If you are thinking about using a credit card to pay off another card, consider all of your options first. Is there any other way you could get the money required to make your minimum payment? Some people tighten their budgets, for example, while others pick up a side hustle. Even borrowing money from family or friends is likely to be a better solution than taking out a cash advance especially if you have a plan to pay them back as quickly as possible.
Pay Your Minimum On The Outstanding Balance Until Your Transfer Is Processed
If youre like most people, there will be a small amount for minimum payment on that card and youll want to pay it off completely so there are no fees later on in case something happens and you cant pay the full thing. After paying your monthly minimum payment , transfer as much money as possible from another card onto this one.
Make sure they allow transfers into their accounts sometimes they dont or just call them before applying and make sure to let them know what youre doing so they dont decline your application.
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And No It Wont Earn You Any Reward Points
Paying one card with another is heading down a slippery slope of debt.
Paying the balance on one of your credit cards with another credit card is possible. But when you make a credit card to credit card payment, youre not reducing debt youre simply moving it from one account to another. Whether or not this is a good idea depends on factors such as interest rates, your overall credit and debt situation and whether you have a plan or are scrambling to keep up with payments.
How can I pay my credit card bill with another credit card?
Typically, you cant simply pay your credit card bill with another card as if you were paying your utility or phone bill. Credit card companies dont usually accept credit cards as a regular form of payment, in part because it opens the door for debt to revolve through your accounts in an infinite loop. But that doesnt mean you cant use one credit card resource to pay off or make payment on anothers balance. Cash advances and balance transfer offers are two ways you can make this happen.
How do you pay a credit card with a cash advance?
Once you get the cash, you have to convert it into a format that lets you pay your credit card bill. You can deposit it into your checking account or buy a money order to mail to your credit card company.
Can you transfer money from a credit card to another credit card?
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.
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Use A Debt Consolidation Loan
If your credit card interest rates are exorbitantly high, you can try applying for a debt consolidation loan. When you consolidate debt, you can obtain lower interest rates that make repayment much easier on your finances. If you have less than perfect credit, know that there are debt consolidation loans for bad credit online.
Balance Transfers Are A Good First Step To Paying Off High Credit Card Balances
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.
- 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.
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Alternatives To A Balance Transfer Credit Card
If you arent quite sure a balance transfer is the best option for you, there are other options. If you can manage to pay off your lingering debt with one lump sum payment, that is always going to be the route with the least amount of risk. Of course that may require a significant amount of cash, which is not always just lingering around.
Another option to keep in mind is a personal loan. Taking out a personal loan to pay off credit card debt has its pros and cons, but since personal loans tend to offer lower interest rates than credit cards, you may save some money in interest over time.
Taking out a personal loan for credit card debt has its advantages when it comes to debt consolidation because aside from a lower interest rate, you can pay off your debt in full and youll only have one monthly payment.
Now, paying off your credit card debt in full with a personal loan does not immediately make you debt-free. You still have to pay off your personal loan. However, by consolidating your debt into one loan, you will only have one monthly payment to worry about. This can make it easier to plan ahead when it comes to calculating your monthly expenses, and it may also help you pay off your loan more quickly depending on what your minimum payment is.
Should You Consider A Balance Transfer Instead
If youre tired of settling one debt with another, a balance transfer credit card is one option to consider. By transferring all of your credit card balances to a balance transfer credit card, you can score 0% interest for anywhere from 12 to 21 months.
Youll still need to make monthly payments on your new balance, but with a 0% APR, they should be markedly lower, and you wont accrue new interest charges during the introductory period, allowing you to make faster progress in paying down the balance. If youre serious about dropping your debt, you could use this time to get out of debt faster.
A few considerations should come to mind as you consider any balance transfer offer. First, some balance transfer cards charge a balance transfer fee equal to 3% to 5% in order to secure your new line of credit with an introductory 0% APR. Second, the best balance transfer cards are only available to individuals with good credit or better.
Lastly, a balance transfer credit card cant help you get out of debt unless you stop digging. If you transfer your balances, than continue spending on your other cards, you wont be better off in the end. To get the most out of a balance transfer credit card, you need to stop spending, get serious about your debts, and stay the course.
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