Ultimate Guide: Know the Way of Credit Card to Credit Card Payment

Ever wondered how to pay a credit card bill using another credit card? It is not a direct process. Most financial institutions do not allow this payment option. 

But, there is an indirect method to achieve this, known as a balance transfer. As a credit card user, you can smartly handle your repayments through this. It will make them easier as you can consolidate debt from multiple credit cards. 

While this method might sound good, it’s essential to understand how it works before trying it out. Let’s learn how to pay a credit card bill using another credit card in some easy steps. 

Step-by-Step Guide for Credit Card to Credit Card Payment

Follow these simple steps to pay your credit card bill using another credit card:

Confirm the Amount That Must Be Transferred

• Review your credit card bill to confirm the amount you need to pay using the balance transfer
• Ensure the balance transfer amount is within the credit limit of the new card

Research and Compare Balance Transfer Credit Cards

• Look for credit cards offering low interest rates for balance transfers
• Use an online credit card EMI calculator to compare different options
• Check for the duration of any no-interest periods offered by the card

Check the Fees Charged for a Balance Transfer

• Banks typically charge a transaction fee for the transferred amount
• Contact the bank directly to confirm the exact fee, as it may vary between institutions

Apply for a Balance Transfer Credit Card

• Apply through the bank’s website or by downloading their mobile banking app
• Ensure you meet all eligibility criteria for approval

Check Your Credit Limit Before Initiating the Balance Transfer

• Double-check the credit limit on the balance transfer credit card
• Avoid exceeding the limit to prevent failed transfers or penalty charges

Benefits of a Credit Card Balance Transfer

Here are some of the benefits of a credit card balance transfer you should know before transferring your funds from a credit card:

• Interest savings

Transfer your outstanding balance to a card offering a lower interest rate to reduce your overall interest outflow.

• Simplified payments

Combine multiple credit card dues into a single, manageable payment, making it easier to track and manage your finances.

• Faster debt repayment

With reduced interest rates, a larger portion of your payment goes towards clearing the principal. This can help you clear your debt sooner.

• Improved credit score

Timely repayments through a balance transfer can lower your credit utilisation ratio. This can then improve your credit score over time.

Tips for Using Credit Card Balance Transfers

If you're paying high interest on your credit card, switching to one with a lower rate can help you save money. However, before making the move, consider these key factors:

• Balance Transfer Fee

Most banks charge a fee of 2% to 4% of the transferred amount

• Cost vs. Benefit

Weigh the fees against potential interest savings to determine if it’s worthwhile

• Late Payments

Even during an interest-free period, missing a payment can lead to interest charges on the remaining balance

• Impact on Credit Score

A balance transfer may slightly affect your credit score, so factor this into your decision

• Credit Utilisation

Ensure the transfer doesn’t push your credit usage too close to the new card’s limit

• Promotional Interest Rates

Many balance transfer cards offer low rates for 6 to 18 months, after which the regular interest rate applies

Pros and Cons of Credit Card to Credit Card Payment

This method comes with lots of advantages and disadvantages. Some of these are given below: 

Pros

• Earn reward points when you pay with a credit card
• Avoid late fees and maintain a high credit score, improving eligibility for better loan and card offers
• Transferring to a card with a lower interest rate helps to reduce overall interest expenses and makes it easier to pay off debt faster
• Stay in control of your credit card debt

Cons

• Banks may charge balance transfer or cash advance fees
• Missing the promo period can lead to higher interest rates and a financial burden
• Using another card for payments adds extra responsibility

Now you know a balance transfer can help you save on interest and clear debt faster – the next step is choosing the right card. A great option you can consider is the One Credit Card. You only have to pay a 1% monthly fee on the total transfer amount, which is comparatively lower than other balance transfer credit cards. 

To make the repayment process easier, you can convert large bills into EMIs to make it more convenient. Save more with 5X reward points on your top two spending categories every month. The card comes with an easy-to-use OneCard App, letting you track purchases and set spending limits effortlessly. 

Apply for this lifetime-free credit card online and start your rewarding journey!