Leila asked:
I know it would be a stupid thing to do but do people do it. I think it would be funny if someone had two credit cards and payed them off using the other card every month. They’d pay off credit card 1 with credit card 2 this month then use credit card 2 to pay off credit card 1 next month.
I know it would be a stupid thing to do but do people do it. I think it would be funny if someone had two credit cards and payed them off using the other card every month. They’d pay off credit card 1 with credit card 2 this month then use credit card 2 to pay off credit card 1 next month.
#1 by hotmama123 - December 28th, 2009 at 02:01
NOOOOOOOOOOOOOOOOOOOO!!!!!
These are dangerous games.
#2 by Emily - December 28th, 2009 at 21:20
You can do it, it’s called a balance transfer. Sometimes you can get a new credit card with a lower interest rate so it is worth it to transfer the balance of a credit card with a high interest rate.
#3 by Steve D - December 30th, 2009 at 06:53
While you could do this, it would not be financially smart. That would be considered a balance transfer if you went direct from one to the other or a cash advance if you took the cash to pay off the other. In cases of balance transfer, the credit cards usually charge a 2 or 3% transfer charge on the balance - which translates into 24 - 36 percent annually - a much higher interest rate then you would have just making the normal payment. Cash advances usually accumulate interest from day one - and usually at a higher rate then the normal interest rate.
Balance transfers usually only work out when you can get an introductory no-interest card - that way you save the interest charges for the length of the introductory offer in exchange for paying the 3% up front — let’s say you transfered $1,000 to a twelve month introductory card from a 10% annual interest rate card. Simple interest for a year on card one would be $100 ($1,000 times 10%) while the transfer fee would be $30 ($1,000 x 3%). This transfer would save you $70 if you paid off within the year.
#4 by darckling - December 31st, 2009 at 17:15
yes, quite a lot of people do it all the time these days.
#5 by Big Brotha Mike - January 3rd, 2010 at 16:55
Yeah, I have Fidelity Signature Rewards Visa that I use to pay for my other credit cards. The reason I have other credit cards is that they have good rewards in different categories (e.g. gas, grocery, utilities, etc.). I just funnel my normal expenses through my various rewards cards to maximize my rewards. Then I pay them all off in full each month (on my Fidelity card).
Paying my other credit cards with the Fidelity card is convenient, plus it gives me one more month of “float” which earns me an extra $100-$200 per year in interest while the money sits in a high-yield liquid money market account.