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Wondering if you can pay a credit card with a credit card? Well, what if I told you that you could?
Look, life happens and sometimes we bite off a bit more than we can chew. If you’re in debt, especially credit card debt, there’s a 99% chance you couldn’t afford whatever it was you were buying. I’m trying to be nice here by leaving the 1%.
Instead of quitting while you were ahead, you kept making bad decisions so now you’re in a fugged up situation, right? I’m not here to judge, because I’m totally describing my old self right now.
After finally deciding that I was sick of borrowing money to pay for my belongings, I extinguished the fire from my credit cards and got serious about my payoff plan. After the smoke cleared, I was left with $5,000 in damages. For a 21-year-old college student with a ramen noodles income that amount felt 4x greater.
Even though I was making bi-weekly payments, my balances were not dropping as quickly as I expected them to. Sound like your situation?
There was no way I was willing to stay in credit card debt for centuries so I did some research. After scrolling through Google, I came across an article that suggested using a credit card with a 0% intro APR to pay off my credit card debt.
Turns out that it was the BEST decision ever. In less than a year, I was able to pay off more than $3000. Some months I was barely able to pay more than the minimum, so this was a huge advantage!
I’m now completely credit card debt-free, and I know that this will help you accelerate your payoff too!
What is an APR and why do I need one that’s 0%?
APR stands for Annual Percentage Rate. This is the interest you’re charged over the entire year.
Right now, I know what you’re thinking. You have enough credit cards so why do you need another one just because of an intro APR? Let me explain…
Let’s say you carry a $3000 balance on your credit card, and the APR is 18%. Considering that you maintain the same balance, you’ll wind up paying $540 in interest alone! Even if you make $100 payments to your credit card each month, it will still take you 40 months to pay it off! Uh-uh, honey!
If you were using a card with a 0% APR that $540 could have gone towards your total balance, thus helping you knock it out a whole lot faster. A 0% interest rate means that your full payment is going towards your balance versus the lender taking their cut and tossing whatever is remaining to your debt.
Get it now? *Cue the angels singing*
Here’s how to pay a credit card with a credit card:
Step #1) Apply for a credit card with a 0% intro APR
This first step is a no-brainer.
If your credit score is roughly around a 650 or above then you will qualify for most cards. There are quite a few credit cards out there that offer a 0% intro APR, but they will not all have the same features and perks. That being said, I recommend doing a bit of research to find the one that is best for you.
If your credit is not the best, don't stress. I was once the queen of denials, but I was able to refinance my auto loan at 2% and rip through my car loan because of my improved score. Here's how I increased my credit score 100 points in one year!
*I highly recommend using Credit Sesame to track your credit score. It's completely free to use and offers you tips and recommendations to help strengthen your score!
Card details to compare:
- The length of the introductory rate
- Balance transfer fees
- Annual fees
- Cashback rewards
- APR after the intro rate
Best comparison sites to use:
Step #2) Do a balance transfer
To maximize a 0% APR, consolidate other balances you have by doing a balance transfer. This can include:
- Personal loans
- Medical bills
- Store balances
...and other debts!
Balance transfers typically come with a small fee or interest rate of around 3-5%. For example, let's say you're transferring a $2000 balance with a 5% fee. This means that you will have an additional $100 added to your existing balance.
Some cards may offer no fees and 0% on transfers, but not many. Still, a small fee doesn’t compare to how quickly you’ll be able to bulldoze through your balance.
When transferring your balances, be sure to make note of the date your APR will change. Depending on when the introductory period ends, decide where you want your balance to be by that time. Preferably, it will be paid in full but, realistically, that may not happen for everyone.
Step #3) Attack your balance like a maniac
Create a plan of action in which you calculate the monthly payment you need to make in order to reach your goal.
Keep in mind that once the introductory period ends you will start accruing interest on your remaining balance again. Interest rates can range from 13%-26%. This will ultimately increase the time it will take to pay off your debt again, so be sure to attack from all angles while you’re still at 0%.
Throw nickels, dimes, and pennies!
Posts to check out next!
Step #4) Transfer your remaining balance to another card with a 0% intro APR
Sometimes things happen and you aren’t able to pay off all of your debt before the introductory rate ends. That’s OKAY.
I'll admit that I was not able to get to a $0 balance after my intro rate ended. Still, deciding to pay a credit card with a credit card was working and I wanted to continue doing it. So, I transferred my balance over to a new 0% intro APR card to avoid adding more time to my payoff journey.
This step is key to helping you continue to pay off credit card debt quickly, but must be considered carefully.
You are able to continue making interest free payments. Also, with a higher overall credit limit, your credit utilization will be lower (as long as you don't run it up) which helps to strengthen your credit score.
If this step is not used correctly, you could wind up in an even bigger mess than before.
With a new card, you now have more available funds to ‘borrow’ from. It can be tempting to swipe.
If you let it get the best of you, you will now have yet another account to keep up with and more debt to pay off.
Drowning in credit card debt is extremely stressful and disheartening. It takes a huge toll on your other financial responsibilities, but with the right strategies, you can get out of this vicious cycle.
I know that you can get out of debt, which is why I created this free online course! This email course is filled with actionable steps to help you dump debt and start living life on your own terms. I know these strategies work because I used them to destroy over $34k in debt in 4 years—even with a low income!
Credit Cards I Have Used and Recommend
This card is my favorite due to the 5% cashback perks, but has the shortest introductory length out of the three listed.
Annual fee: None
Introductory length: 0% Intro APR for 14 months on purchases and balance transfers.
Balance transfer fee: 3% for each balance transfer
Cashback rewards: Earn 5% cashback on rotating quarterly categories and 1% cashback on all other purchases.
Perk: Use my link and get a $50 statement credit when you make your first purchase within three months!
American Express Blue Cash Everyday
I used American Express to pay off the remainder of my credit card balance and still benefit from their cashback rewards.
Annual fee: None
Introductory length: 0% intro APR on purchases and balance transfers for 15 months.
Balance transfer fee: $5 or 3% of the amount of each transfer
Cashback rewards: Earn 3% cashback at supermarkets, 2% cash back at U.S. gas stations & select U.S. department stores, and 1% cashback on all other purchases.
Perk: Apply here and get $200 back in the form of an account statement after you spend $1,000 in purchases within the first 3 months of membership! That's $200 towards paying off your debt!
This card doesn’t have as many perks but the lack of a balance transfer fee makes up for it!
Annual fee: None
Introductory length: 0% intro APR for 15 months on purchases and balance transfers.
Balance transfer fee: $0 balance transfer fee within the first 60 days, then 5% of the amount transferred.
Cashback rewards: None