Credit cards have become an essential part of our everyday lives. When it comes to paying your credit card bills, choosing the right method can make a big difference. If you have multiple credit cards, you can pay a credit card bill using a credit card. While this idea may seem convenient, it’s not always a simple solution.
Most credit card companies don’t allow direct payments from one card to another. Banks and financial institutions typically don’t accept one credit card as payment for another. However, there are some indirect ways to do it. While these options can be helpful, it’s important to understand whether they’re allowed and how they work before trying them.
Balance Transfer
With balance transfer, you can move the outstanding balance from one credit card to another. As a credit card user, you can smartly handle your funds through this method. It will make your repayments easier as you can consolidate debt from multiple credit cards. Just ensure it stays within the new card’s credit limit.
But not all banks offer this service, so you’ll need to find one that does. If you’re paying high interest on your credit card, switching to a card with a lower interest rate can save you money.
Things you should consider before balance transfer are:
- When you transfer a credit card balance to another card, a fee of 3%-5% usually applies.
- It’s crucial to consider the costs against the benefits to see if a balance transfer is worth it for you.
- A balance transfer may slightly impact your credit score, so keep that in mind before proceeding.
- Make sure you don’t surpass the credit utilisation ratio over 40% or get too close to the new card’s credit limit during the transfer.
- If the new card may offer a lower interest rate as part of a promotion, it typically lasts for 6 to 18 months and then resets to the regular rate.
Cash Advance
Another method to pay a credit card bill using a credit card is by withdrawing cash. With this option, you can withdraw cash from the nearest ATM using one of your cards. Thereafter, you can use the funds to pay the bill of another at the bank.
This short-term solution can be your last resort when you are closer to the deadline or your request for a balance transfer is denied. You can also deposit the money into your bank account and then use it to pay the bill. Before opting for this, consider some drawbacks of using a credit card for your credit card cash advance:
- The interest rate on cash advances is higher than the regular credit card interest rate.
- The issuer may charge a cash advance fee of 2% to 3% on the withdrawn amount.
- In the following month, you will have to pay the bill on two cards, the one with the existing credit card dues and the one used for cash withdrawals.
- If you don’t expect funds to pay the bill on your credit card, then it can lead to higher debt next month.
How to Maintain Credit Card Bills
Using one credit card to pay for another can sometimes lead to the blocking of your card. If not paid on time, it can lead to debt accumulation. This is why it’s smart to manage your bill from day one. Here are some tips to help you with that:
- Paying your bill on time can help you avoid late fees and interest charges
- Review your credit card statement each month to see where you are spending too much and control it
- Keep the credit utilisation rate as low as possible
- Use reminders to pay the dues on time if you are forgetful about those
- Avoid overspending unless necessary
- Use your credit card’s reward points and offers to save on all the expenses
With this, you can avoid the risk of using one credit card to pay the bills of another. Even if you do opt for this, avoid making it a habit, as it can lead to high-interest debt. Alternatively, if you are looking for a credit card that has a low cost to keep your credit card bill low, consider the One Credit Card.
The One Credit Card offers great deals on multiple categories, so you can save with every transaction. It also gives 5X reward points on your top two spending categories per month, which allows you to save more.
You can also convert large bills into affordable EMIs without any interest to make bill payments more convenient. In case of emergency, you can get access to the cash in your bank account in just a few seconds with their ‘OneCash’ feature.
This sleek metal card is paired with an easy-to-use mobile application, OneCard App, for easy management. Using this, you can track purchases and set spending limits so you can stay on top of your finances. Apply online, start a stress-free credit journey, and take control of your sends to avoid debt.
