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Personal loans issuers won't allow you to use a credit card to pay your loans. Is there a way around this? I have lots of credit card with good amount of remaining credits. And I have very high interest personal loans. I have been paying off some of my credit cards. Now I realized I should have been paying off the loans with high interest first instead of the credit cards. Now I'm left with good amount of available credit on my credit cards and high debt to pay on my personal loans. Any way around, any trick to use my credit cards to pay off my personal loans? Thank you very much.

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    Please specify the rates of the loans and the rates of the credit cards. Also the amount of debt involved. It will make it clear if your plan will save you any money if we know the numbers. – mhoran_psprep May 8 at 10:22
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    Borrowing further go get out of debt is a losing game. Just pay off your loans. – Pete B. May 8 at 10:30
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    "just" is not a helpful word here, @PeteB. – Kate Gregory May 8 at 14:34
  • @PeteB. I believe this question is about refinancing, not going further into debt. – TTT Nov 3 at 21:22
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Merchants must pay a fee (typically 2 or 3 percent) for accepting credit cards, so it would cost the lender extra to accept them. Cash advances also have a similar fee (to prevent bypassing the merchant fee), so that's not a great option.

Mechanics aside, paying loans with a credit card just shifts the debt from one high interest rate loan to another. It's a sign that you're spending more than you make which will not stop unless you change something.

The first step is to stop spending extra. One way to do that is to get on a written budget. Total all of your income for the next month and start allocating it to expenses, starting with the most critical: shelter, food, necessary utilities (i.e. water and electricity, not cable/streaming and cell phones). Then add in other expenses in order of importance. Debt payments go last. If you have money left over, pay minimum payments on the debt and attack one until it's gone. If the interest rates aren't significantly different, then attacking the one with the lowest balance gets it out of the way fastest, gives you a psychological boost, and frees up some money to go to the next loan. Do that until your debts are paid off.

If you do NOT have money left after allocating to expenses, then you have three options: Increase income (get a second job, sell stuff, etc.), skip payments (contact the lender first to see if there's some sort of deferment that will reduce the penalties), or go into more debt. Obviously the third option just compounds the problem.

If you can't (or won't) do that, then you could shift as much of your spending as possible to the credit cards and use the extra cash to pay off the debt, slowly migrating the debt from one source to another. But you HAVE to realize that this isn't solving the problem. You're just reducing the pain - the pain won't go away until you get spending under control or add to your income.

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Credit is designed in such a way that it isn't very easy to pay debt with more debt. Being able to float debt and continually incur debt is something that banks want to protect against. So, there are really only bad options to do this.

If your credit card supports a cash advance, then you can take out cash, but it's usually at a much higher interest rate. You can go through a 3rd party payment processor, that your loan provider supports, that takes a credit card. This will incur a processing fee percentage.

It's unusual for a loan payment rate to be higher than a CC rate, they're designed to have different risk levels and the rates should reflect that, so it might be good to check the rates and not confuse an introductory rate for a constant rate.

The best option, though, is to look into a consolidation loan. You can apply to have all of your CC and personal loan debt consolidated into a loan that would hopefully have a lower interest rate, which can be further mitigated by backing it with some collateral.

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You definitely can do this, and unlike the other answers, I believe you should do this. You are essentially refinancing your debt at a lower interest rate and I believe it's a great idea. (I've done it many times in my life.)

You are looking for the term "balance transfer".

When you do a CC balance transfer, you are allowed to pay off other debts, even those that aren't credit cards. Depending on your credit rating, typically a credit card balance transfer offer has a low introductory rate for a specified amount of time, for example 0% for 12 months, or 2.9% for 18 months, etc. The usual thing to watch out for with balance transfers is that you really want to strive to have the entire balance paid off before the low rate term expires, because after that the rate jumps up to the higher normal rate. But in your case, your higher regular CC interest rate is still lower than the personal loans rate, so it could be worthwhile for you to do this even if you aren't given an introductory balance transfer rate.

Note: unlike CC purchases, balance transfers cannot be initiated from the receiver of the money (because they would incur a 2-3% merchant fee). Balance transfers have to be initiated by the credit card bank, so you need to contact your credit card(s) and ask them if you can use some of your remaining balance for a balance transfer to pay down other debt. If you are in good standing it's usually an easy process. Who knows- you may even have a lower intro rate, which would be an added bonus.

Warning: if you intend for your debt to be long term, since CC's are variable there is always a chance that the CC interest rate could adjust to be higher than any fixed rate you might have. Just be mindful that this is possible, especially if you ever make late payments on your CC.

Tip: If you haven't already, set up auto payment on your credit cards to pay at least the minimum every month. You can (and should) always pay more than that, but this way if you ever forget you won't miss a payment which could hurt your credit rating for many years, and possibly increase your interest rate on the card.

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