The use of one credit card to pay off another – is it sensible?

How frequently have you taken into consideration making use of for a fresh credit card to repay your current one? In case you haven’t finished it but, properly and accurate, let’s hope you gained’t reach a point to adopt that desperate step.
Technically, it’s no longer viable for an instantaneous transfer of cash from one credit card, however you can do it indirectly. So what are the ones methods? Let’s discover the method and consequences.

Through balance transfer

You can pay your credit card invoice using another through balance transfer. It means you could switch your stability from credit card a to credit card b where the credit card b need to be one with a decrease interest price, preferably a card that has a introductory 0 percent apr (annual percentage rate) provide. This no-interest length ensures that the monthly bills you are making all through the promo period completely move closer to the principal balance.

Pros & cons

Balance transfers could be a fantastic option for a person who’s searching forward to switch his credit card to one which gives a lower interest rate and different incentives. Card issuers commonly offer interest-free bills for the initial months and afterwards, interest would be charged as consistent with the repayment tenure you select. In case you are able to parent out the proper deal, shifting debt would save you a lot of cash in the long run.

Most credit cards fee a price for moving balance of some other credit card. You must do your studies and find out whether the fee is well worth you transferring to any other credit card.
If the transferred debt is not paid in complete earlier than the interest-free period ends, the amazing amount will be challenge to the card’s normal apr and that could be better than the cardboard you’re shifting from.

If you miss a payment, you will be charged interest on the remaining debt even if the interest-free period isn’t over.

You could also be declined within the procedure if you have a questionable credit records and a low credit score.

Withdraw cash using your credit card

Suppose you own two credit cards, a and b, and you need to pay off your existing bill in credit card a. All you have to do is withdraw cash using your credit card b from the respective financial institution’s atm, deposit into your debit account after which repay credit card a using that money. That is a problem-free way to pay off a credit card bill that’s due.

pros & cons

Cash advance is a fast option and it’s going to technically come up with the ability to repay every other credit card, that could have an excellent better interest rate. In this type of scenario, you can now not have the time to do a balance switch or your balance transfer request may additionally get rejected. Cash enhance is a reliable choice in that feel.

But, you may incur big prices including credit card cash advance fee whilst taking cash from a credit card. Usually banks charge 2.5 percent to 3 percent of the amount withdrawn as credit card cash advance fee.

You can no longer constantly get the money you require as the financial institution or the credit card issuing organization could’ve set a restriction for the coins that might be withdrawn. Additionally, the feature may not be available on all credit cards.

Add money to an e-wallet

Take into account credit cards a and b and the preceding scenario where you needed to pay card a’s bill using card b. Transfer cash from card b to an e-pockets, the paytm wallet for instance, and then both transfer the money from the wallet to your financial institution account or pay card a’s invoice the usage of the pockets itself if the choice is to be had.

Pros & cons

Adding money to an e-wallet after which shifting it to the bank account is more or much less a digital form of the preceding approach wherein you withdrew money from the atm. That’s the primary benefit, you don’t have to take the pain of going to an atm, chickening out cash from your credit card and then depositing it to your financial institution account.

However, there is a rate for the transfer of money which typically stages among 2.5-3 percent. Once in a while, you can also be declined from transferring the cash in case your credit card restrict has been breached.

While there are a few alternatives, paying your credit card bills on time is the handiest manner to keep away from late expenses and interest. In an damaging state of affairs, these options may additionally help you get your costs under control.