One of the most popular questions on the Internet concerning finances is, “Can you pay one credit card with another credit card?” It’s one heard all the time in this practice and is indeed a favorite topic. The answer is that yes, you can pay one credit card with another – but there are some tips and tricks to doing it successfully.
First, let’s look at laying the groundwork for doing this.
1. Take a thorough look at your overall debt, not your credit card debt alone, but student loans, automobile loans, and your rent or mortgage.
2. Consider your monthly expenses such as your rent or mortgage, utility bills, automobile expenses, and other obligations.
3. If your overall debt is manageable, then create a schedule for paying it down.
4. If you are going to have problems meeting your current debt obligations and daily living expenses or facing current collections actions, you may need to speak with an experienced debt and bankruptcy attorney.
5. If you are already to the point of considering or preparing for bankruptcy, if you are facing eviction or foreclosure, or if you are facing a repossession on your vehicle, this is not the course for you. Speak with an experienced bankruptcy attorney as soon as possible.
It’s safe to say that Americans and credit card debt go together like peanut butter and jelly. In fact, Americans have not been out of credit card debt. According to a recent study, only 35% of credit card users pay off their balance every month, which leaves another 65% who carry a revolving balance. When taking into consideration the interest charges that pile up on that balance, the best investment you can make in your future is to pay off your credit cards. The result will be more money in your pocket every single month, and the chance to save in cash for the big purchases you want to make. This approach leaves credit cards open and available for those times when you need them.
While you can pay one credit card with another, you need to do it in such a way that it doesn’t end up costing you more in the long run. There are several different methods for doing this type of transaction. You may have noticed that when paying your credit card bill there is no way to pay your credit card with another credit card. That would be too easy! First, let’s look at the easiest way for you to pay off a credit card bill, using the resources from another credit card.
See what I did there?
You’re not using the credit card so much as you are using the resources afforded to you by the credit card. One of those resources is a cash advance. When using this approach, you will use an open credit card to secure a cash advance. After obtaining the advance, deposit the cash into your checking account and pay the bill from there. The caveat, in this case, being that cash advances may carry higher interest rates than you would pay on purchases, depending on your card. So while you might be paying off a high balance with higher interest charges, you have to compare the advantage with paying off to assuming a high balance on another card at what might be a higher interest rate. Remember, skipping or making a late payment can be grounds for your credit card issuer to hike your interest rate. Paying off a card with cash might be a quick fix, but it can be a long-term disadvantage.
A balance transfer might look like a knight in shining armor if you’re carrying enough credit card debt. Enough people are doing balance transfers that there are cards specifically created with a 0 percent APR on balance transfers for periods ranging between 12 and 18 months. However, once again, look at the fine print first. There is almost always a fee for balance transfer. This fee typically runs between three and 5 percent of the total balance being transferred. It might cut into what you would save using a balance transfer from a high balance, high-interest card. You may be able to find and obtain a card that either does not charge this fee or waves the fee under certain conditions. It’s also important to remember that these cards may impose a penalty for late payment or skipped payments. These penalties can include the immediate termination of the 0% APR promotion, as well as late charges, and over-limit fees.
Everyone has heard the old saying, “Just because you can does not mean that you should.”
Asking if you can pay off one credit card with another credit card may not be the question that you need to ask yourself. Instead, try asking yourself what factors in your lifestyle led to this debt.
All too often, credit card debt is a symptom of a larger problem. If all your credit cards are either maxed out or close to being maxed out every month from covering regular expenses such as groceries, gasoline, and utility bills, then it’s time for some financial intervention. It doesn’t matter where your debt came from, you need to treat it now. If you are not earning enough to cover your costs, overspending, and carrying major debt, it may be time for significant intervention in the form of a consolidation loan – which can save money on both payments and interest rate – or for bankruptcy.
Bankruptcy sounds like the nuclear option, but it is a legal protection afforded to people who have gotten in over their head. To find out what is best for you in the long term, talk to Van Horn Law Group. Our offices in West Palm Beach and Fort Lauderdale are staffed with experienced and caring people who will help you see past the quick fixes and understand the big picture. Call today, we are open seven days a week, and the consultation is free.
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