A reader's boyfriend thinks he found a clever loophole. He hasn't. But he still has options.

2 minute read

Question: My boyfriend is a great guy, but he’s not good with his money. He’s always looking for a “get rich quick” scheme, which of course ends up costing him money instead of making him money.

While I pay off my credit cards every month, he has about $12,000 he’s carrying on several cards, I don’t even know how many. He thinks he can open some more cards and use them to pay off his old cards. I told him I love him, but he’s an idiot. I can’t imagine that will work. If it was legal, everyone would be doing it already.

We’ve agreed to listen to what you say. I hope you can answer this, because I’m thinking of marrying this guy, but I can’t fight about this anymore.

— Jessica in Oregon

Howard Dvorkin CPA answers…

Your boyfriend is mostly wrong, but he’s not completely wrong.

No, you can’t simply pay off one credit card by swiping another credit card. Why? Because as you say, Jessica, the credit card companies are smart enough to forbid it.

Still, your boyfriend has options. I’d recommend only the last two, however…

Borrow from yourself

You can take out a cash advance on one credit card to pay off another. Of course, the credit card companies realize this is a possibility, so it’s no coincidence that cash advances cost more in fees and interest than you owe on your initial purchases. This isn’t something I’d ever recommend, but I mention it just in case your boyfriend stumbles upon this idea, too.

Buy some time

Another idea I’ll shoot down: Using your credit cards to buy everything, thereby taking advantage of the “grace period” to have enough money to pay another card. You could do this for a while, I suppose, but eventually, it’ll catch up to you.

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Balance transfer

Some credit cards allow you to transfer the high-interest balances from other cards to theirs — and pay no interest for up to 18 months. With the average credit card interest rate hovering around 16 percent, that’s a significant savings.

Of course, these credit card companies aren’t offering this deal out of kindness. They know darn well that many folks won’t pay off those balances in 18 months. Thus, they make money in the long run — your money.

Still, if you use these cards deftly, you can save heftily. Read The ABCs of Credit Card Balance Transfers for details.

Credit counseling

As anyone who’s read this column for even a little while knows, I’m a huge advocate of credit counseling. The reason is simple: You get a detailed debt analysis from a certified credit counselor, and it costs you nothing. Your boyfriend seems like a perfect candidate. Instead of trying to get rich quick, he can learn the next best thing: Get rich slowly. Ask him to read What Is Credit Counseling And Why Do I Need It?

Finally, Jessica, I urge you to have a frank conversation about money. As Debt.com reported last year, a lack of cash and communication are the major causes of divorce. Don’t become a statistic, Jessica.

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About the Author

Howard Dvorkin, CPA

Howard Dvorkin, CPA

I’m a certified public accountant who has authored two books on getting out of debt, Credit Hell and Power Up, and I am one of the personal finance experts for Debt.com. I have focused my professional endeavors in the consumer finance, technology, media and real estate industries creating not only Debt.com, but also Financial Apps and Start Fresh Today, among others. My personal finance advice has been included in countless articles, and has appeared in the New York Times, the Washington Post, Forbes and Entrepreneur as well as virtually every national and local newspaper in the country. Everyone should have a reason for living that’s bigger than themselves, and besides my family, mine is this: Teaching Americans how to live happily within their means. To me, money is not the root of all evil. Poor money management is. Money cannot buy happiness, but going into debt always buys misery. That’s why I launched Debt.com. I’m glad you’re here.

Published by Debt.com, LLC