Do You Earn Points by Paying Off One Credit Card with Another?

paying off one credit card with another

Is paying off one credit card with another a great way to earn points or miles?

It’s a valid question, and one worth looking into. It would make sense to wonder if paying off one credit card with another is going to earn you points. After all, you are spending money, you are using the card and, technically, you are paying it off. However, it’s not exactly as cut-and-dried as it sounds. To begin with, paying off one credit card with another is actually referred to as the ever popular balance transfer. It’s not actually considered ‘paying off a card’ in terms of your debt.

To pay off a credit card means you send in a check or money order in the amount that is outstanding and you rid yourself of that debt completely. When you use one credit card to pay the balance on another credit card, it’s nothing more than a balance transfer. That leads us into the rules and regulations of balance transfers. Balance transfers are a great idea if you are looking to pay off a debt that has a high interest rate. The way that a balance transfer works is by allowing you to transfer the balance from a high-interest credit card onto a card with a lower interest rate or one that has a 0% APR on balance transfers for a specific number of months as an introductory offer. This allows consumers more time to pay off debts for a less expensive price.

However, there is no way that you will earn points or mils when you transfer a balance from one card to another. Even if you could use your airline, hotel or rewards credit card to earn points on balance transfer amounts, you’re looking at several issues. The first is that you are going to pay a fee to transfer a balance. This fee is always between 3 and 5% of the balance you transfer, which is often enough to make any potential points obsolete. The second issue is that rewards cards are not all that beneficial to those who are not able to pay their balance in full each month. If you are paying off one credit card with another because you are stuck paying interest on the balance, that tells us you don’t pay your balances in full. This limits the number of reward points/miles you can earn in the first place, which almost makes a reward card pointless for you.

One consideration to make if you are using a balance transfer card with a 0% introductory rate for however many months, consider  one that is also waiving transfer fees for a certain number of days so that you are able to transfer your balances without paying additional fees.

At the end of the day, there is not a way you can earn rewards with balance transfers by paying off one credit card with another. You will have to make purchases and pay them off the old fashioned way to earn your rewards, miles and points with your credit card.

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