Can you pay off one credit card with another?

If you’ve ever gotten in over your head with credit card debt and found yourself short on cash, you’ve likely wondered, “Can I pay off one credit card with another?” Or, if you’re really leaning into the idea of “card hacking” in order to maximize cashback or earn free travel, the idea has probably crossed your mind, too.

Don’t be tempted: not only is it hard (and expensive) to do but (with one exception) paying off one credit card with another isn’t a sound financial move.

Can I pay off one credit card with another?

Most card companies won’t allow this. They will want their money -- real money from a bank account.

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If you really need cash to make the card payment and have credit available on another card, using a cash advance to pull cash out of an ATM is a last-resort option. Then, you’d deposit this cash into your bank account like you would a paycheck and can make the payment to your credit card from there.

This option, however, is not advisable unless you’re in the direst of circumstances and risk falling behind on payments and damaging your credit without it.

Is a cash advance a good idea?

Let’s not sugarcoat this: paying off one credit card with another via a cash advance is a terrible idea. This is because most card companies charge a higher interest rate for cash out of an ATM than they do for card transactions. Typically, cash advance limits on credit cards are small, so you may not be able to even pull out enough cash to cover your other card payment in full.

If you’re already having trouble making payments or staying on top of card spend, using a cash advance means you’ll rack up even more interest on the card at an even faster rate than before.

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The one loophole – the balance transfer offer

Usually the only time it is possible to pay off one card with another is by leveraging a balance transfer offer.

If you have a valid transfer offer from your card company available, you can do a balance transfer at any time. It is most advantageous, however, to take advantage of balance transfer offers if there is a promotional interest rate involved.

For example:

You have maxed out Card A, which has a limit of $10,000 and an interest rate of 20 percent. You also have Card B, and you’re currently not carrying a balance on this card. Because you’re such an excellent cardmember for Card B, this card company offers you a balance transfer offer of 0 percent APR for 18 months.

By transferring your debt from Card A to Card B, you won’t have to pay any interest on the debt for 18 months and you can make some serious repayment progress. The trick is to be extra aggressive and have it all paid off within the promotional time period, because after then you’ll have to start paying interest on the balance again.

Are balance transfer offers a good way to pay off one credit card with another?

It is important to realize balance transfers are not free. Typically, a card company will charge you a flat fee or a certain percentage of the balance transferred.

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Using the example above, Card B charges you 3 percent of the balance transferred, so if you transfer your full outstanding balance of $10,000, you’ll end up paying $300 in fees, so the total balance you’ll pay off over time will be $10,300.

Weighing this out against the amount of interest $10,000 would accrue at 20 percent over 18 months, it is still better to go with a balance transfer. Even if you’re only able to transfer a partial amount, balance transfer offers can provide an avenue to get ahead with debt repayment, especially if you’re having trouble actively paying down debt each month, or just need a bit more breathing room in your budget.

In short, it’s best to only use one card to pay off another if you can get a balance transfer offer. Otherwise, it’s better, and cheaper in the long-term to focus on other debt reduction strategies.