You can pay a line of credit with a credit card using a balance transfer, cash advance, mobile payment service or money order. It is not possible to directly charge a line of credit payment to a credit card, though, as issuers do not want you to consistently borrow to pay off borrowed money.
Ways to Pay a Line of Credit With a Credit Card
A balance transfer is the best way to pay a line of credit with a credit card. Your credit card issuer pays off the line of credit, effectively moving the balance to your card. You should only do this if you have a lower APR on your card than on the original line of credit. There may also be a balance transfer fee, usually 3% to 5% of the balance transferred. If you’re interested in a balance transfer, you can check out the best balance transfer credit cards on WalletHub, many of which offer long 0% introductory APRs.
Mobile payment service
If you have accounts with services like Venmo or PayPal, you may be able to use a credit card to send money to another account you own. Then, you can transfer that money to a bank account and use it to pay your line of credit. Depending on your credit card issuer, this may count as a cash advance and incur expensive fees and interest that starts accruing right away.
A cash advance is a way to access your card’s credit line at an ATM to get cash. This is an extremely expensive transaction and the interest will start piling up the moment you make it, with no grace period. It’s not an ideal payment method but could be used to save you from missing a payment in an emergency situation.
It’s possible to purchase a money order from a company like MoneyGram or Western Union using a credit card. You can then use the money order to pay off a line of credit. The purchase of the money order will register as a cash advance, though, and thus will be very expensive.
In all, it’s really not ideal to pay a line of credit with a credit card unless you plan on moving the entire balance over through a balance transfer. The best way to make a payment on a line of credit is through a linked bank account or debit card. Getting cash from your credit card can temporarily stop you from missing a payment on your line of credit, but then you’re stuck dealing with all the fees and interest that come with that.
Ways to Avoid Paying Off a Line of Credit With a Credit Card
If you want to avoid having to use a credit card to pay a line of credit in the future, there are a few strategies you can try. The first is to change your line of credit’s due date (if the issuer allows it) so that it’s shortly after you get your paycheck. That may help make it easier to prioritize paying your line of credit before any non-essential expenses.
Speaking of non-essential expenses, it’s also a good idea to try to cut back on as much spending as you can until your line of credit payments become manageable again.
Finally, you could consider asking for an advance on your paycheck or borrowing money from friends or family, though those naturally aren’t ideal solutions.
You can pay a loan with a credit card directly in the rare cases it’s accepted, or by using either a credit card balance transfer or a third-party money transfer service to pay the loan. Most auto lenders, mortgage companies, and student loan providers will not accept credit cards as a form of payment for loans, and money transfer services can be expensive.… read full answer
If a lender won’t let you pay a loan with a credit card directly, try to:
Use a balance transfer credit card. Balance transfers are most commonly used to transfer credit card debt to a lower-APR credit card, but you can often use them to transfer loan debt, too. The balance transfer credit card issuer will make a payment to your lender for the amount you want to transfer, shifting that balance to the credit card. Just make sure your lender and your card issuer are not the same company – if they are the same lender, the transfer will be declined. Also, consider whether or not a balance transfer is a good idea for your situation.
Make loan payments with a third-party payment service. Some payment services, such as Plastiq or Western Union, allow you to pay bills with a credit card when you wouldn’t be able to otherwise. It’s not free, however – and in most cases, it’s not even cheap. Using these services with a credit card will rack up transaction fees that vary depending on which service you use, but typically the fees range from 2% to 3%. Not to mention that using a credit card with these services may count as a cash advance to your card issuer, which comes with its own fees and APRs. And in the case of Western Union, your lender may not accept this form of payment.
Unless your lender accepts credit card payments directly, it’s a good idea to consider the costs and benefits of paying a loan with a credit card – whether by third-party payment service or a balance transfer – before you do it.
For instance, if you aren’t able to pay off your credit card balance at the end of a balance transfer credit card’s promotional APR period, you’ll rack up expensive interest charges. And with balance transfers, there are usually balance transfer fees. On the other hand, if your third-party payment ends up logged as a cash advance on your credit card, there’s no grace period for that debt, and cash advances typically have their own higher APR. Plus, there are usually fees that come along with cash advances.
But if you’re in a position where paying with a credit card will avoid loan default, then these costs may be worth it.
WalletHub Answers is a free service that helps consumers access financial information. Information on WalletHub Answers is provided “as is” and should not be considered financial, legal or investment advice. WalletHub is not a financial advisor, law firm, “lawyer referral service,” or a substitute for a financial advisor, attorney, or law firm. You may want to hire a professional before making any decision. WalletHub does not endorse any particular contributors and cannot guarantee the quality or reliability of any information posted. The helpfulness of a financial advisor's answer is not indicative of future advisor performance.
WalletHub members have a wealth of knowledge to share, and we encourage everyone to do so while respecting our content guidelines. This question was posted by WalletHub. Please keep in mind that editorial and user-generated content on this page is not reviewed or otherwise endorsed by any financial institution. In addition, it is not a financial institution’s responsibility to ensure all posts and questions are answered.
Ad Disclosure: Certain offers that appear on this site originate from paying advertisers, and this will be noted on an offer’s details page using the designation "Sponsored", where applicable. Advertising may impact how and where products appear on this site (including, for example, the order in which they appear). At WalletHub we try to present a wide array of offers, but our offers do not represent all financial services companies or products.