How to Pay a Credit Card Bill Using another Credit Card?

Posted on Tuesday, August 27th, 2024 | By IndusInd Bank

Paying one credit card bill with another credit card is usually not available as a standard direct payment option. However, you can use indirect methods such as a balance transfer, cash advance, or supported e-wallet.

These options can help during a temporary cash-flow problem, but they do not remove the debt. They can also involve processing fees, interest charges, and additional credit exposure. Understand the cost and repayment terms before choosing one.

Ways to Pay Credit Card Bill with another Credit Card

Balance Transfer

A balance transfer allows you to move an outstanding balance from one credit card to another eligible card. The new card issuer either pays the old card issuer directly or provides an approved process for transferring the balance.

A balance transfer can be useful when the new card offers a lower interest rate or a fixed repayment plan. Before applying:

1. Check the exact amount outstanding on the existing card.
2. Compare the balance transfer interest rate with the current rate.
3. Check the processing fee, GST, repayment tenure, and post-offer interest rate.
4. Confirm that the available credit limit is sufficient.
5. Continue paying the existing card until the transfer is completed and confirmed.
6. Repay the transferred balance on the new card as per the agreed schedule.

A balance transfer is beneficial only when the total cost is lower and you have a clear plan to repay the new balance.

Cash Advance

A cash advance involves withdrawing money from one credit card and using it to pay the bill of another card.

This method is generally expensive because it attracts a cash advance fee. Interest on cash advances also starts from the date of withdrawal instead of receiving the usual interest-free period.

Use this option only in a genuine emergency. Check the cash advance limit, withdrawal fee, interest rate, and repayment terms before proceeding.

E-Wallet or Payment Platform

Some e-wallets and payment platforms allow users to load money using a credit card and use the balance for bill payments. However, this facility is not available on every platform or for every card.

Before using this route, check:

• Whether credit-card loading is permitted
• Whether credit-card bill payment is supported
• The convenience fee and applicable taxes
• Daily or monthly transaction limits
• Whether the transaction qualifies for rewards or cashback
• Whether additional verification is required

Use only the official application or website of the payment platform. Never share your card PIN, OTP, CVV, or net-banking password with anyone.

Pros and Cons of Paying a Credit Card Bill Using another Credit Card

Using another credit card to pay an existing bill has both advantages and disadvantages.

Possible advantages include:

• It can help you avoid a late payment when you are facing a temporary shortage of funds.
• A balance transfer can reduce the interest cost if the new rate and fees are lower.
• It can combine multiple outstanding balances into one repayment schedule.
• It can give you additional time to organise your finances.

The disadvantages to consider:

• Processing fees, cash advance fees, convenience fees, and GST can increase the total cost.
• Cash advances attract interest from the transaction date.
• The debt is transferred or extended; it is not cancelled.
• Using a large part of the new credit limit can increase your credit utilisation ratio.
• A promotional balance transfer rate can end, after which the regular interest rate applies.
• Rewards or cashback are not guaranteed on balance transfers, cash advances, or wallet-loading transactions.
• Missing the new card’s payment due date can create another late payment and further increase the debt.

Use this option only when it solves a short-term problem and you can repay the new outstanding amount on time.

What are better ways to stay on top of your credit card bills?

The safest way to manage a credit card bill is to pay the Total Amount Due from your bank account before the due date. This helps you avoid interest on eligible transactions and prevents the outstanding balance from building up.

If you use an IndusInd Bank credit card, you can pay through authorised channels such as IndusNet, the IndusInd Bank Mobile Banking app, NEFT, Credit Card Quick Pay, NACH, auto-debit, and other payment methods listed by the bank.

You can also follow these habits:

• Set a reminder a few days before the payment due date.
• Activate auto-debit only after ensuring that your bank account has sufficient funds.
• Pay more than the Minimum Amount Due whenever possible.
• Stop fresh spending on the card if the existing balance is becoming difficult to repay.
• List all card balances, interest rates, fees, and due dates in one place.
• Prioritise repayment of the card charging the highest interest.
• Contact the card issuer early if you cannot pay the full amount.
• Consider a structured repayment or balance transfer only after comparing the complete cost.

Paying only the Minimum Amount Due can prevent the account from being treated as overdue, but interest continues on the unpaid balance.

Stay Ahead of Your Credit Card Bills Without Adding More Debt

Using one credit card to pay another should be a carefully considered decision, not a regular repayment habit.

A balance transfer can make sense when it offers a lower overall cost and you can clear the transferred amount within the agreed period. Cash advances and wallet-based payments require greater caution because their fees and interest can quickly increase your financial burden.

Whenever possible, pay your credit card bill directly through your bank account and use authorised payment channels. If you need more practical guidance, read Smart Spending: The Advantages of Using Credit Cards for Payments.

Frequently Asked Questions

Q1. Are reward points or cashback earned when paying a credit card bill through an e-wallet using another credit card?

Rewards and cashback are not guaranteed. Many card issuers exclude wallet loading, balance transfers, cash advances, and bill payments from reward programmes. Check the terms of both the credit card and e-wallet before completing the transaction.

Q2. Can a balance transfer help reduce the interest paid on existing credit card debt?

Yes. A balance transfer can reduce the interest cost when the new interest rate and all applicable fees are lower than the cost of keeping the balance on the existing card. Compare the processing fee, GST, repayment tenure, and post-offer rate before deciding.

Q3. What factors should be compared before choosing a balance transfer credit card?

Compare the balance transfer interest rate, processing fee, GST, maximum transferable amount, available credit limit, repayment tenure, promotional-period terms, post-offer interest rate, late-payment charges, and foreclosure or pre-closure conditions.

Q4. Does using one credit card to pay another affect the available credit on both cards?

Yes. The card used for the payment loses available credit by the amount charged or transferred. The balance on the receiving card also occupies its credit limit. The available limit on the original card increases only after the payment is credited and processed.