Can I Buy a Money Order with a Credit Card?

A money order can be a reliable method for sending money, acting like a prepaid check. You pay for the money order upfront, ensuring the funds are guaranteed. You address the money order to a particular person or company, who can cash it similarly to a bank check.

Consider using a money order when you need to pay or transfer funds securely. It’s generally safer than carrying cash or using personal checks. You can purchase a money order using a debit card or cash. If you’re curious about whether you can buy a money order with credit card, keep reading for further details!

What Is a Money Order?

A money order is a prepaid financial tool for making payments or transferring funds without needing a personal check or bank account. Like checks, it offers guaranteed payment security, as it is paid for in advance and must be returned for sufficient funds. This makes it useful for those without access to traditional banking or in cases where immediate payment is required.

To purchase a money order, you must pay the full amount upfront and a fee that typically ranges from $1 to $5, depending on the provider. You can buy money orders at post offices, banks, grocery stores, and more. Most money orders have a limit of $1,000; for larger amounts, you may need to purchase multiple orders or pay higher fees.

Money orders are often chosen for privacy and security reasons. They do not require personal bank details, offering more privacy than personal checks. Additionally, they are safer to send through the mail than cash, making them a practical option for long-distance transactions. The recipient can cash or deposit the money order at banks or other financial institutions, although some locations might impose a fee for this service.

Where Else Can You Buy a Money Order?

Money orders can be purchased at various locations. U.S. post office branches, including those on military bases, offer them. Banks and credit unions also offer them, usually to their account holders.

Additionally, many retail outlets, such as Walmart, convenience stores, supermarkets, and drugstores, sell money orders, often through Western Union and MoneyGram agents located within the stores. For those without bank accounts, check-cashing stores also frequently offer money orders.

How Does a Money Order Work?

A money order functions differently from a traditional bank check. When you issue a check from your checking account, the funds are not withdrawn until the recipient deposits or cashes the check. In contrast, a money order requires you to pay the full amount upfront through a reliable payment method like cash or a bank transfer from your checking or savings account.

People choose money orders over other payment methods for several reasons:

• They do not have a traditional checking account.
• They must pay someone who does not accept credit cards, checks, or digital transfers.
• They prefer a secure method to send money by mail without exposing their bank details.
• They require a method to confirm that the money has reached the recipient.

Money orders solve a significant issue associated with checks: the risk of insufficient funds. If a check is cashed without enough money in the account, it can lead to an overdraft fee and the recipient not receiving funds. This potential problem makes some individuals and businesses unwilling to accept personal checks. A money order, however, is prepaid, ensuring the recipient that the funds are already secured.

Advantages of Using a Money Order

1. Security

Money orders provide a reliable level of security for financial transactions. When you buy a money order, you pay the full amount upfront, which means the funds are guaranteed and immediately available to the recipient upon deposit or cashing.

This eliminates the risk of bounced payments, which can occur with personal checks. Sellers can confidently accept money orders, knowing that the funds are secure.

2. Traceability

Money orders include a tracking feature. With each purchase, you receive a receipt that contains a tracking number, enabling you to verify whether the money order has been cashed. This level of traceability is essential for resolving disputes or providing proof of payment in transactions where it’s important to confirm receipt of funds.

3. Accessibility for Non-bank Users

Money orders are beneficial for people without bank accounts. They enable individuals to participate in financial transactions without a bank account, enhancing financial inclusion and providing access to basic services for those who are unbanked or underbanked.

4. Privacy

Money orders offer more privacy than personal checks. Unlike checks, which include your name, address, bank account number, and routing number, money orders require only the purchaser’s signature and the recipient’s name.

This helps keep your banking details private, making money orders safer for transactions with individuals or small businesses where personal information security is a concern.

5. Convenience

Money orders are easy to obtain and can be purchased at post offices, grocery stores, and convenience stores.

They are a practical alternative for those who lack access to standard banking services or choose not to use them for specific transactions. In 2021, the Federal Deposit Insurance Corporation reported that 9.7% of U.S. households used money orders, highlighting their role as a convenient payment method.

6. Wide Acceptance

Many entities, including businesses, rental agencies, and utility companies, accept money orders as payment. Their broad acceptance is largely due to the security they offer, as the payment is guaranteed. This makes money orders a flexible option for fulfilling various financial commitments that require reliable payments.

Can You Buy a Money Order with Credit Card?

You cannot buy a money order directly with a credit card. Post offices, banks, and stores usually accept only cash or debit cards for these transactions. However, you could take a cash advance from your credit card and use that cash to purchase the money order.

However, getting a cash advance comes with several costs and limitations. Credit card issuers typically charge a cash advance fee, usually 3% to 5% of the transaction amount, or a flat fee, whichever is higher. For example, on a $1,000 cash advance, you might pay $50 in fees. In addition to the fee, the interest rate (APR) on cash advances is often much higher than regular purchases—sometimes as high as 29.99%. Importantly, cash advances start accruing interest immediately, with no grace period, making them expensive unless paid off quickly.

Taking out a cash advance also might harm your credit score by raising your credit utilization ratio. Utilizing over 30% of your available credit may further lower your score.

Additionally, if your credit card already carries a balance, some issuers may apply payments to the purchase balance first instead of the cash advance balance. Since cash advances typically accrue higher interest rates, this practice can make it more difficult to clear your overall balance.

Given the costs involved, it’s worth considering alternatives. If you’re using money orders to pay bills, an ACH transfer from your bank or debit card might be more affordable​. If a cash advance is your only option, pay off the amount as soon as possible to avoid mounting interest charges.

Alternatives to Purchasing Money Orders

If purchasing a money order through credit card services such as Western Union isn’t suitable, there are various alternatives you might consider.

• Cash or Debit Card: Money orders can be bought using cash or a debit card at locations such as banks, post offices, and retailers like Walmart or CVS. These methods usually have lower fees than those associated with credit cards, which typically involve expensive cash advances.
• Online Payment Services: Digital platforms such as PayPal, Venmo, or Zelle facilitate quick electronic transfers, eliminating the need for a physical money order. These platforms enable secure payments without depending on paper transactions.
• Wire Transfers: For significant sums, consider a wire transfer via your bank. Although wire transfers generally incur higher fees than money orders, they provide instant access to funds, which can be crucial for time-sensitive payments.
• ACH Transfers: An ACH transfer from your bank may be a more practical method for routine payments such as bills. Typically free or inexpensive, this option is well-suited for regular transactions like rent or utility payments.

Each alternative offers distinct advantages and drawbacks. It’s essential to evaluate the specific requirements of your transaction to determine the most appropriate method for fund transfers. For example, wire transfers are preferable for large amounts, whereas platforms like PayPal or Venom are ideal for smaller, quicker transactions.

Do you earn rewards when buying a money order with a credit card?

Purchases with credit cards categorized as cash advances, like buying a money order, generally do not earn rewards. Most credit card companies view money orders as equivalent to cash transactions, often ineligible for rewards such as points or cashback. For instance, the Citi Premier® Card specifies that transactions like money orders, wire transfers, and similar financial movements do not accrue ThankYou points.

This policy is standard across many credit card companies, so it’s unlikely that you’ll receive rewards for money-order purchases made with your credit card.

Conclusion

While money orders offer a secure and practical way to transfer funds, purchasing one with a credit card can be challenging and expensive. Most vendors only accept cash or debit cards for money orders, and using a credit card often requires a costly cash advance. This option also carries high interest rates and potentially impacts your credit score.

It’s important to explore alternative payment methods like debit cards, ACH transfers, or online services that might better suit your needs without the added fees and complications associated with credit card cash advances.

Frequently Asked Questions