Facing a tight pocket? And worrying about how you’re goingto pay your credit card this month? Or waiting for a tax reimbursement,commissions, or insurance settlement to pay the bills?
Have an idea to pay-off your credit card bill with anothercredit card? So, that in return you can earn some reward points or cash back. Unfortunately, none of the major card issuers willlet you do that, as far as we know.
However, you can use a debit card to pay-off your debt andVisa rules also allow that payment. But you cant pay a credit card bill withanother credit card due to a number of restrictions.
If you really have to “pay” for your nexttransaction with your credit cards, workarounds are available. There areactually three, but they all come at a cost.
1. Try to Geta cash advance
As long as your card has credit available in it, you areable to use your credit card to get an advance cash. Later you can use thatmoney to pay 2nd credit card bill. If you have a PIN for your card, you can geta cash advance at banks branch, credit unions or at an ATM.
There is a pitfall with this option, that the interest rateon cash advances is usually higher than purchases. Moreover, interest ratecontinues to accrue. This means that interest is charged at the time oftransaction no matter you pay-off the cash advance by the due date. Alwaysconfirm the interest rate before you move on with this option.
2. The RPTPP method
If you are a business person and cash flow is the cause forwhich you want to use a credit card to pay for another credit card. Fortunately,there is another option with which you can achieve your objective. Thatapproach is ‘Rob Peter to Pay Paul.’ Use your credit card for daily expenditureto save cash as much as possible to pay your credit card bill. It is not anideal option, but anyone can adopt it during a cash crunch.
3. Balance Transfer option
If any of your card providers offers a balance transferoption, then you can use it to pay-off your other card balance. Moreover, onecan also use convenience checks which you receive via mail, to pay on anothercard (you cannot, however, use a convenience check to pay on the same account).
On the other side you can deposit the check into yourchecking account to make a payment using these funds. If you have not receivedconvenience cheques offers in the mail, check online or by phone with your cardissuer to see if you are eligible.
You may be eligible for a low- rate balance transfer card if your credit score is strong. Please note that these offers most often charge fees ranging somewhere between 2% to 4% of the transferred amount. It is often difficult to find a credit card with a 0% balance transfer without a fee, but it does exist.
Balance Transfer is the best of the three methods mentionedhere. A low- rate transfer offer can be an intelligent way to reduce yourinterest rate while you are paying off your debt. Moreover, one can use acredit card payoff calculator such as this to compare the time it takes for youto pay off debt at different rates.
Opt with Care
None of above options can help to earn reward points, sothese options are probably off the table for such plans. Moreover, if you arefacing temporary cash flow problems, above options will just dig a deeper holefor you. Moreover, just transferring your debt from one place to another maynot help your long- term credit scores. Debt is one of the most important factorsconsidered in the calculation of credit scores.
If your debt lowers your credit scores, then paying-off yourdebit is one and only the best ways to build a stronger credit score.