How to Pay Credit Card Bill from Another Credit Card

A credit card is one of the most useful financial tools available. It is a convenient method to manage your credit debts and improve your credit score, provided you pay the credit card bills on time. But what if you are not able to pay the credit card bill for the month on time due to an unprecedented emergency? Can you pay a credit card bill from another credit card?

Can We Pay a Credit Card Bill from Another Credit Card?

Yes, it is possible to pay a credit card bill using another credit card, but it typically involves a few extra steps. Most banks do not allow direct payments from one credit card to another. Instead, you can use a balance transfer option to transfer the outstanding balance from one credit card to another. This is often done to take advantage of lower interest rates or promotional offers on the new card.

Alternatively, you could use a cash advance from one credit card to pay the bill on another, but this approach is usually costly due to high interest rates and fees associated with cash advances. Another option is using a third-party service like a digital wallet, which allows you to pay with a credit card and then transfer the funds to pay off the bill. However, these methods should be used cautiously, as they can lead to more debt if not managed properly.

Nevertheless, you can pay one credit card bill from another credit card, but there are different methods with which you can do so. Let’s explore them in detail.

How to Pay a Credit Card Bill from Another Credit Card?

There are different ways to pay a credit card bill from another credit card, here’s how:

1. Through Balance Transfer

   A balance transfer allows you to shift the outstanding amount from one credit card to another, either in full or partially, depending on your needs. This process lets you pay off the previous card’s balance using the new card. The new card often comes with a lower interest rate and may offer an interest-free period for the first few months, making it easier to manage repayments.

   When considering a balance transfer, keep the following in mind:

   • A fee of 3%-5% typically applies when transferring your balance from one Credit Card to another. Weigh this cost against the benefits to determine if the transfer is worthwhile.
   • If you fail to make timely payments, you’ll incur interest on the remaining balance, even during the interest-free period.
   • Choosing a balance transfer might cause a slight dip in your credit score.
   • Ensure your credit utilisation ratio remains well below the credit limit during transfer.
   • Be aware that the lower interest rate on the new card is often promotional, lasting between 6 and 18 months, after which the standard rate will apply.

2. Through Cash Withdrawal

   A cash advance could be an option if you’re looking for a fast way to pay a credit card bill using another credit card. With a cash advance, you can withdraw money from an ATM that allows credit card transactions up to a certain limit set by your card issuer and use those funds to pay your bill.

   However, consider these points before opting for a cash advance:

   • Cash advances come with a higher interest rate, often exceeding the rates for regular credit card purchases.
   • You’ll be charged a cash advance fee, typically around 2.5% to 3% of the amount you withdraw.
   • Using an ATM cash advance for credit card bill payments can be costly, so carefully assess your financial situation before choosing this option.

3. Through Wallets

   Digital wallets offer a convenient way to store money online, making them an easy option for various payments, including paying your credit card bills. If you need to use one credit card to pay the bill of another, you can load funds into your preferred e-wallet app, whether it’s a third-party app or one backed by your bank.

   The process of adding money to an e-wallet using your credit card is quick and straightforward. Simply enter your card details, authorise the transaction with an OTP sent to your registered mobile number, and the funds will be available in the wallet. You can then effortlessly use this balance to pay off the bill with another credit card.

4. Through a Personal Loan

   Another viable method to pay a credit card bill is by getting a personal loan. This option is beneficial if you have substantial balances with high interest rates, as personal loans often come with lower interest rates and can be used to pay off credit card bills. However, addressing the root issues of overspending and poor debt management is important. If these problems aren’t resolved, you risk falling into a debt cycle, where you may end up taking out more loans just to cover your credit card bills.

Benefits of Paying Credit Card Bill with Another Credit Card

Paying a credit card bill can be daunting, especially when using multiple credit cards. However, paying a credit card bill with another credit card is a viable option in such situations. There are several benefits of paying your credit card bill with another credit card. Here are some of them:

• Earn Rewards: When you consolidate your credit card payments, you can earn cashback or reward points on the payment. These rewards can get better if you use a credit card with lower interest rates and higher rewards for maximum benefits.
• Eliminate Late Fees: If you cannot pay your credit card bills due to an unexpected monetary emergency, you can use a credit card to avoid late fees. Late fees can get expensive on your monthly credit card bill, which can cause a significant financial burden.
• Boost Your Credit Score: If you have multiple credit cards with high balances and interest rates, transferring the balances to a card with a lower interest rate can be a smart move. This can help you save on interest costs and boost your credit score by lowering your credit utilisation ratio.

Cons of Paying Credit Card Bills with Another Credit Card

While paying one credit card bill with another credit card is a tempting offer to choose from, it comes with several disadvantages and some risks you should be aware of. Here are some of the most common cons:

• Additional Fees: Taking one credit card to pay another credit card bill can come with additional charges, such as cash advance fees or transfer fees. These fees can further add up to your debt.
• High Interest Rates: If the new credit card you use to pay your existing card bill isn’t repaid on time, especially when the promotional offer period ends, you may incur higher interest rates, which add to your existing debt.
• Tampered Credit Score: If you keep using the full credit limit of your credit cards and open multiple accounts, it can negatively affect your credit score.

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Bottom Line

In India, paying a credit card bill directly with another credit card isn’t an option, but there are effective ways to manage your credit card debt. Assess your financial situation carefully and choose a strategy that aligns with your needs. Responsible debt management is key to long-term financial health. By exploring your options and making informed choices, you can take control of your finances and move toward becoming debt-free.

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