Balance transfer credit card
A balance transfer moves debt from one credit card account to another, typically to avoid paying high interest rates. For example, you could have a balance transfer card with a 0% introductory annual percentage rate (APR) for 18 months.
If you transfer a balance to that card, you don’t have to pay interest for 18 months if you follow the promotional offer’s terms and conditions. However, there’s often a balance transfer fee of 3% to 5%, so you have to determine if you can save more on interest by paying the fee.
Note that many credit card companies have specific rules about balance transfers. For instance, you typically can’t transfer a balance between two cards from the same company.
If you want to do a balance transfer, check with your new card’s issuer — including Capital One, Chase, American Express, Bank of America, Wells Fargo, or another company — to see their specific rules.
Cash advance
A cash advance borrows cash against your card’s credit limit. That means you can access some money using your credit card in an emergency. Technically, you could take out a cash advance on one card to pay the bill on another.
However, this strategy could lead to more debt because of cash advance fees and interest charges. With most credit card purchases, you have a grace period before interest accrues. With cash advances, interest often starts accruing immediately.
Ways to pay off someone else’s credit card debt
While you typically can’t pay another person’s credit card debt with one of your credit cards, there are alternatives.
Transfer their credit card balance to your card
You might consider doing a balance transfer for someone else if your friend or family member doesn’t qualify for a balance transfer credit card themselves. Many balance transfer cards require a good or excellent credit score for approval.
Some financial institutions allow you to transfer a balance from someone else’s credit card to your balance transfer card. Check with your bank or credit union to see if this is possible.
If you transfer a balance from someone else to your credit card, you’re effectively taking on the debt yourself. Unless there are specific terms and conditions in place, you will be responsible for paying off the transferred balance.
Cash donation
If you feel generous and have enough money, you can give someone else enough cash to pay off their credit card balance. It’s simple, but it requires some trust and potentially a sizable amount of money, depending on the size of the debt.
Note that gifts of money could have tax implications, so it makes sense to read up on gift taxes before donating large sums of cash. If you have any questions or concerns, consider consulting a tax professional.
Personal loan
A personal loan with no interest could make sense if you want to help a friend or family member, but don’t necessarily want to gift a sizable amount of cash. You could still set up specific repayment terms to make sure the other person is paying you back within a reasonable amount of time. However, setting up the terms of any agreement would be entirely up to you.
You could also charge interest on the loan if you want to treat it more like a business transaction (this would likely depend on your relationship with the other party). If you charge less interest than the other person’s credit card, it could be a win-win situation for both parties.
Make payments yourself
If your bank allows it, you can add someone else’s credit card as a payee to your online account. Then, you can make minimum payments or more to their card using your savings or checking account. Other options could include making credit card payments in person or calling in.
Note that you may need some account information on hand to make payments for someone else. That could include card information, such as a card or account number.
