Can you Pay a Credit Card with a Credit Card?

By Sasha Yanshin | Published on 1 March 2020

If you have multiple credit cards or you're looking to get a second one, you may well be wondering if it's possible to pay for one credit card with another one but can you actually do that?

You can pay one credit card with another credit card by doing a balance transfer usually costing a fee of about 3% and a higher interest rate than purchases. Credit cards cannot be used to make a regular payment to other credit card accounts.

To find out exactly how you can go and pay one of your credit cards with another one, see my guide below.

How can you pay a credit card with another credit card?

Although technically card companies may say that you cannot make payments to your credit card using another credit card, that is not strictly speaking true.

Enter the balance transfer - this is a special transaction type that every credit card company accepts.

In essence the way a balance transfer works is that you transfer money into the current account of your credit card company with the credit card number of the one you are trying to pay off as the reference.

Once the balance transfer is processed, a payment is applied to your credit card equivalent to the balance transfer amount.

As far as the receiving credit card is concerned, a balance transfer looks exactly like a faster payment except it isn't you sending the money, but the bank account of the other credit card company.

A balance transfer will count as a payment for all major credit card companies as long as it is at least the amount of minimum payment requested and is processed by the payment due date.

Remember that as balance transfers can take several days to process by the receiving company, you need to allow plenty of time before your payment due date for the balance transfer to count as your monthly payment.

The method for paying a credit card with another credit card

In order to pay a credit card with another credit card, you have to log into the account of the card company that you want to use to make the payment (NOT the one receiving it!).

In online banking, you should be able to find a way of making a balance transfer. This will ask for the card number and other details of the card to which you want to make a payment and how much you want to pay.

Typically they will show you the fee you will have to pay which in most cases is about 3% of the total amount. Remember that if you want to do a balance transfer for less than £100, the minimum fee is usually set at £3 which means proportionately you'll be paying more.

Another important point to note is that the interest that applies to the balance transfer will usually be higher than that which applies to purchases and you will be charged interest for the days your card had a balance even if you pay it off in full.

After you've made the payment, the credit card company you've just used will transfer the money to the other one's bank account.

Depending on the other credit card company, it will take between a few hours to a few days for that payment to be processed - in most cases within 3 business days. You'll then see it as a payment in your transactions list and on your statement.

The balance will then be added onto the balance of the first credit card as well as the fee - hence the name "balance transfer"!

Why your credit card company doesn't allow you to pay with a credit card

There are legal reasons why paying for one credit card with another one is not allowed. The underlying reason here is that paying the monthly installments on a debt directly with another debt creating product can lead people down dark alleys.

Although there are ways around it, like the balance transfer process I mentioned above, it's good that customers can't just make regular payments to their credit cards using another card.

The other big reason why this is an industry standard is that credit card companies don't want to help each other out.

A balance on a credit card is exactly what a credit card company wants you to have. The balance means you'll be paying fees and interest and are more likely to continue carrying a balance in the future.

If you were to allow other credit cards to be used as payment, you'll effectively promote your competitors from stealing this balance onto their credit cards instead.

Hence the only way you can do the "payment" is by logging on with the competitor and making the payment from their end via the balance transfer option.

Should you pay a credit card with another credit card?

The choice is yours as to whether you want to pay one credit card with another card.

There are some instances where this can be a great idea. If your other credit card has a lower interest rate, you might be able to save money in the long run.

Alternatively, if you are trying to get a particular number of points or if you need to use your primary credit card for a specific purchase (e.g. buying something in installments), you may need to pay a large amount of money into it quickly whether or not you have the cash.

Whenever you do do a balance transfer and especially if you are taking out a new credit card to do so, make sure you think about whether you're making the right financial move and consider whether you'll be able to make the repayments on both credit cards going forward.

How much and how often can you pay a credit card with a credit card?

There are no real limits in terms of how much and how often you can make balance transfers so that you effectively pay one credit card with another.

The best bit of advice is not to do many smaller balance transfers and instead do one big one - the fees become expensive if you pay less than £100 and managing many small payments is time consuming.

There's also an outside chance that the credit card company may pick up on you doing a strange number of small balance transfers and block you from being able to do balance transfers in the future or increase the cost.

Both would be pretty annoying if you wanted to do balance transfers in the future.

Should you withdraw cash from one credit card to pay another one?

There's another way that you can pay one credit card with another. Take the card you want to use for the payment, stick it into an ATM, withdraw the amount of cash you need and then go pay the bill from your other credit card using cash and a giro slip or via a bank branch.

Although technically this is doable and it will work, the balance transfer method is a much better option. Withdrawing cash will usually incur the same 3% fee, but the interest rate associated with cash withdrawals on credit cards will be much higher than balance transfers.

You probably also don't want to be going around with wads of cash and in some cases, the cost of getting to the cash machine and the deposit bank will add extra costs to making the payment.

Lastly, cash withdrawals can have a negative impact on your credit file. It won't be a huge drop, but cash transactions are reported separately to credit reference agencies so there's an extra reason not to do it.

What you need to know about paying for a credit card with a credit card

There's a few key things you need to know about paying one credit card with another credit card. I mentioned some of them further up, but here's all the important bits.

  • To use a credit card to pay another credit card, you'll need to do a balance transfer.
  • A balance transfer usually has a fee of about 3% and a higher interest rate than standard.
  • A balance transfer may take a few days to go through so time your payment appropriately.
  • In almost every case, a balance transfer counts towards your minimum payment.
  • You'll need to do the balance transfer by logging in or calling the card you will be using for the payment, NOT the card you are paying into.
  • Make sure you are able to make at least the minimum payment on both credit cards if you choose to do a balance transfer and continue using the card you've just paid into.

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