For many Indian credit card users facing a cash crunch, a seemingly simple solution might be to use one card to settle the bill of another. However, banking regulations in the country strictly prohibit this direct method. The core reason is to prevent consumers from spiraling into an unmanageable debt trap by merely shifting balances instead of clearing them.
Why Direct Card-to-Card Payments Are Blocked
Financial institutions that issue credit cards have designed their payment systems to accept settlements only from a linked savings or current account. Whether you pay online, via an app, or over the phone, the transaction must originate through a banking channel like NEFT, IMPS, or UPI. Using one credit card to pay another is technically not an option in these gateways. Banks enforce this rule as a protective measure. Allowing such payments would let users indefinitely rotate debt, potentially doubling or tripling their total liability without actually reducing it.
Legitimate Avenues to Manage Credit Card Debt
While the direct route is closed, there are a couple of sanctioned strategies that achieve a similar outcome. Cardholders must understand these come with specific terms and costs.
1. The Balance Transfer Facility
This is the most standard and recommended approach. Here, you apply for a balance transfer to a new credit card. The issuer of the new card then pays off the outstanding amount on your old card directly. The debt is effectively moved, not paid from your pocket.
The appeal lies in the offers. Many major card providers in India promote balance transfers with lower interest rates or a promotional 0% interest period, making it a useful tool for debt consolidation. It provides breathing room to repay the shifted amount under better terms. However, users must diligently check all associated fees and the interest rate that applies after any promotional period ends.
2. Cash Advance & Manual Payment
A technically possible but highly discouraged method involves taking a cash advance from Card A. You withdraw the cash, deposit it into your bank account, and then use those funds to pay the bill for Card B.
This method is fraught with financial pitfalls. Cash advances attract extremely high interest rates from the day of withdrawal, with no grace period whatsoever. Additionally, they often carry separate transaction fees. This path can lead to rapid and expensive debt accumulation, making it financially unsound for most users.
Key Takeaways for Indian Credit Card Holders
If you need to manage dues but lack immediate funds in your bank account, the balance-transfer route is the cleanest and most financially prudent option available. Always compare offers and read the fine print on fees.
As a rule, avoid resorting to cash advances or third-party payment apps (wallets) for this purpose, as banks do not accept them for direct credit card bill payments. These "hacks" typically end up costing more in interest and charges than they save.
In essence, while the literal act of paying one card's bill with another is not permitted, utilizing a bank's own balance-transfer facility provides a practical and legal alternative. It should be used judiciously as a debt management step, not as a habitual financial practice.
