What it means to pay a credit card with another credit card
Paying one credit card with another credit card is possible but usually costs you money and can damage your credit score. Most credit card issuers treat a payment from another card as a cash advance, not a regular purchase. A cash advance typically carries a higher interest rate than regular purchases — often 3 to 5 percentage points higher — plus an upfront fee of 3 to 5 percent of the amount transferred.
The exception is a balance transfer card, which lets you move debt from one card to another at a lower rate, usually 0 percent for a set period (typically 6 to 21 months). But even a balance transfer charges a fee, usually 3 to 5 percent, and only works if you have a new card with available credit.
Most people consider paying one card with another only when they are short on cash and have no other option. It is a short-term fix that often makes the debt problem larger, not smaller.
Key Takeaways
- Paying a credit card with another credit card is treated as a cash advance by most issuers, which means a higher interest rate and an upfront fee.
- A balance transfer card can move debt at 0 percent interest for a limited time, but you pay a one-time transfer fee and need available credit on a new card.
- The interest rate on a cash advance starts when ready and does not have a grace period, so the debt grows faster than a regular purchase.
- If you are considering this option, a personal loan or debt consolidation plan may cost less and damage your credit less than a cash advance.
How a cash advance works when you use one card to pay another
When you use a credit card to pay another credit card balance, the issuer of the paying card sees it as a cash advance. You are withdrawing money (in the form of a payment) rather than making a purchase. This triggers different terms than a regular transaction.
The cash advance fee is charged when ready and added to your balance. If you transfer $2,000 and the fee is 5 percent, you owe $2,100 right away. The interest rate on that $2,100 starts accruing the same day — there is no grace period like there is for regular purchases. Most cards charge 25 to 30 percent APR on cash advances, compared to 15 to 25 percent on purchases.
You also may hit a cash advance limit, which is separate from your credit limit. Many issuers set a cash advance limit at 20 to 50 percent of your total credit limit, so you might not be able to transfer as much as you think.
Balance transfer cards: the lower-cost option
A balance transfer card is designed specifically to move debt from one card to another at a reduced rate. The issuer offers an introductory period — commonly 0 percent APR for 6 to 21 months — during which you pay no interest on the transferred balance.
You still pay a balance transfer fee upfront, usually 3 to 5 percent of the amount transferred. On a $5,000 transfer, that is $150 to $250 added to your balance when ready. But if you can pay down the balance during the 0 percent period, you save thousands in interest compared to a cash advance.
The catch is that you need a new card with enough available credit to cover the transfer. If your credit score is low or your existing debt is high, you may not be approved for a card with a high enough limit. Also, once the introductory period ends, the regular APR kicks in — often 18 to 28 percent — so you need a plan to pay the balance before that happens.
Why your credit score takes a hit
Using one card to pay another affects your credit in two ways. First, explore for a new card (if you go the balance transfer route) triggers a hard inquiry, which lowers your score by a few points temporarily. Second, the act of transferring or advancing money increases your credit utilization ratio — the percentage of available credit you are using.
If you have a $10,000 credit limit and transfer $5,000, your utilization jumps to 50 percent. Credit scoring models penalize high utilization, so your score drops. The impact is larger if you already have high balances on other cards.
A cash advance also shows up on your credit report as a separate transaction type, which some lenders view as a sign of financial stress. Over time, this can affect your ability to borrow at good rates.
Alternatives that cost less
A personal loan from a bank or credit union often charges less than a credit card cash advance. Personal loan rates range from 6 to 36 percent depending on your credit score and the lender, but even at the high end, that is lower than most cash advance rates. The loan is also a fixed payment over a set term, so you know exactly when you will be debt-free.
A debt consolidation loan works the same way but is designed specifically to combine multiple debts into one payment. Some nonprofit credit counseling agencies offer debt management plans, where they negotiate with your creditors to lower interest rates and set up a single monthly payment.
If you own a home, a home equity line of credit (HELOC) or home equity loan typically charges much lower rates than credit cards, though it puts your home at risk if you cannot pay. A 401(k) loan lets you borrow against your retirement savings at rates set by your plan, usually prime rate plus 1 percent, but you risk losing retirement funds if you leave your job.
When paying one card with another makes sense
This option is rarely the best choice, but there are narrow situations where it might be worth considering. If you have a 0 percent balance transfer offer and can pay the balance in full before the rate increases, the cost is just the transfer fee — which may be worth it if you are avoiding a much higher rate elsewhere.
If you are in a true emergency and have no other way to access funds, a cash advance is faster than a personal loan process. But this should be a last resort, and you should have a concrete plan to pay it back within a few months, not years.
In almost all other cases, exploring a personal loan, negotiating with creditors, or working with a credit counselor will cost you less and protect your credit score better.
How to minimize damage if you do it
If you decide to proceed, pay as much as possible toward the transferred balance when ready. Every dollar you pay down before interest accrues saves you money. Set a target payoff date — ideally within 3 to 6 months — and treat it like a non-negotiable bill.
Do not use the card you transferred from while you are paying off the balance. Adding new purchases will only extend your debt and make the interest charges larger. If you need to use credit, use a different card with a lower rate.
Track the introductory period end date if you used a balance transfer card. Set a calendar reminder 30 days before the rate increases so you know exactly how much you still owe and whether you can pay it off in time.
Frequently Asked Questions
Can I use a debit card to pay a credit card?
Yes, and this is not treated as a cash advance. Paying with a debit card is a regular transaction, so there is no fee or higher interest rate. However, you can only pay with money you already have in your bank account, so it does not help if you are short on cash.
What happens if I can't pay back the cash advance?
The balance stays on your card and accrues interest at the cash advance rate. If you miss payments, your credit score drops, late fees are added, and the issuer may close your account or pursue collection action. Your best move is to contact the issuer and ask about a hardship plan or payment arrangement before you miss a payment.
Does a balance transfer hurt my credit score?
Yes, temporarily. The hard inquiry and new account lower your score by a few points, and the high utilization ratio on the new card also hurts. But if you pay down the balance during the 0 percent period, your score usually recovers within a few months.
Can I transfer a balance to a card from the same issuer?
Most issuers do not allow you to transfer a balance between their own cards. You typically need to transfer to a different issuer. Check your card's terms or call the issuer to confirm their policy.
Is there a limit to how much I can transfer?
Yes. Balance transfer limits are usually 50 to 100 percent of your credit limit on the new card, and some issuers cap transfers at a specific dollar amount. Cash advance limits are often lower — 20 to 50 percent of your credit limit. Check your card terms or call the issuer to find out your specific limits.