Paying Off Plastic with Plastic: A Guide for the Financially Flexible (or Forgetful)
Ever stared at your credit card bill, heart sinking faster than your bank account balance, and thought, "There has GOT to be a better way"? Well, fret no more, fellow financially flexible friend (or forgetful spender, we don't judge), because this guide is here to shed light on the slightly strange, but surprisingly useful world of paying off your credit card with another credit card.
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| How To Make Credit Card Payment By Credit Card |
Why would you even do this?
This is a valid question, and the answer, like most things in life, is it depends. Here are a few reasons why you might consider this unconventional approach:
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- You're facing a hefty interest rate: If your current card is charging an arm and a leg in interest, a balance transfer to a card with a lower introductory rate can buy you some breathing room (just remember, that intro rate won't last forever!).
- You're a points pro: Some cards offer generous rewards for balance transfers, so you can rack up points while paying down your debt. Just be sure the rewards outweigh any fees associated with the transfer.
- You're in a cash crunch: This one's a bit of a gamble, but in a pinch, you could use a cash advance from one card to pay off another. Warning: This comes with sky-high fees and interest rates, so only use this option if you're absolutely desperate and have a plan to pay it off quickly.
But wait, isn't that like robbing Peter to pay Paul?
Well, yes and no. You are essentially shifting debt from one card to another, but depending on the interest rates and fees involved, it can be a strategic move to save money in the long run. Think of it as a financial juggling act, but hopefully one that doesn't end with you face-planting onto a pile of bills.
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How to actually do this crazy thing
Now, for the nitty-gritty. There are three main ways to pay off your credit card with another credit card:
Tip: Skim only after you’ve read fully once.
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- Balance transfer: This involves moving your existing balance to a new card with a lower introductory interest rate.
- Cash advance: This is essentially taking out a loan with your credit card, but at a much higher interest rate than a regular purchase. Use with extreme caution!
- E-wallets: Some e-wallets allow you to load funds from your credit card and then use those funds to pay off another card's balance. This can be a good option if you want to avoid the high fees associated with cash advances.
Remember, before you jump into this financial foxtrot, be sure to:
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- Do your research: Compare interest rates, fees, and terms of different cards before you commit.
- Have a plan: Make sure you have a strategy to pay off the transferred balance before the introductory rate expires.
- Don't dig a deeper hole: This should be a temporary solution, not an excuse to keep swiping your plastic.
So, there you have it! The slightly strange, but potentially helpful, world of paying off plastic with plastic. Use this knowledge wisely, and remember, responsible credit card use is always the best policy. Unless, of course, you're a financial wizard with a penchant for flamboyant financial maneuvers. But that's a story for another day.
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