Can You Buy a Money Order with a Credit Card?

Can You Buy a Money Order with a Credit Card?

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Often times a money order can be a great alternative to sending cash through the mail. The good news is there are several ways to purchase them. While it is possible to use a credit card, I’d like to explore other, possibly better, ways to purchase a money order.

You can buy a money order with cash, a debit card, a check, and via a bank transfer. You can also pay with a credit card at select locations, but as I’ll explain, it’s probably not your best choice.

You can purchase with a credit card, but you’ll pay high fees.

Select locations allow you to purchase a money order with a credit card, but there are a few things to be aware of, such as high fees. Before we discuss this in detail let’s first talk about what a money order is and when you should use it.

What is a money order?

A money order is a form of prepaid payment that’s a safe alternative to cash or checks. Money orders are safer than cash when making payments by mail: they can be tracked and canceled, and they’re “made out” to a particular recipient – not just anybody can cash a money order.

Sellers (or whoever you’re paying) may also prefer money orders because – when they’re not fakes – they’re almost a form of “guaranteed” payment.

You specify who will receive the money order, and both you and that person must sign it for it to be valid. Unlike with a personal check, the money is guaranteed by a third party, such as the post office, Wal-Mart, or Western Union. The cost usually ranges from under a dollar to several bucks, which can be a bargain compared with some other ways to send money, especially internationally.

When do I need a money order?

There are times when using cash or personal checks can put you at risk, or they aren’t accepted for payment. Examples:

  • You don’t have a checking account and need to pay bills. Since money orders require you to pay in advance, the money isn’t tied to any bank account and can be easily sent to other people. If you want to store your money and pay for more than just bills, a better solution is a prepaid debit card.
  • You’re worried about bouncing a check. Because money orders are prepaid, they can’t be rejected for insufficient funds and aren’t subject to the fees that come with bouncing a check.
  • You’re mailing money. A money order helps ensure that only the recipient can use it.
  • You need to send a payment more securely. Unlike checks, money orders don’t include your bank account number.
  • You’re sending money internationally. Not all money orders work abroad, but U.S. Postal Service money orders can be sent to 28 countries. It’s an alternative to a wire transfer, which is faster but usually more expensive.

Credit issuers treat money orders as cash advances.

Credit card companies treat money order purchases as cash advances. The reason for this is that issuers don’t want you to evade the cash advance interest by sending yourself a money order paid for by your credit card. As you may know, credit card cash advances come with a high interest rate and an additional fee. The interest charges kick in right away, so unless you repay it immediately, you’ll be spending extra money for the privilege of sending a money order.

So let’s assume that using a credit card is your only option. The average credit card charges a cash advance fee between $10 and $20, and an interest rate 1-7 percent higher than your standard purchase rate. Of course, if you planned to repay the cash advance right away, you’d probably use cash to buy the money order in the first place!

Not all locations accept credit cards as payment.

MoneyGram, Walmart, the USPS and Moneytree do not accept credit card payments for money orders. However, these two money order providers do:

  1. Western Union charges you $11.95 for a $100 money order purchased with a credit card. Charges vary with the money order amount.
  2. 7-Eleven charges $1 to $5, depending on the amount of the money order.

You can also buy money orders at your local bank. Alternatively, your bank will prepare a certified check for you. In either case, payment is via your bank account or cash, but not credit cards unless you first take a cash advance.

5 cost & card-friendly money order alternatives

There are several card-friendly alternatives to money orders:

  1. Many payees, such as utilities, insurance companies, rental agents and cellular providers accept online bill payments directly from your checking account, and you can set up regular automatic payments if you like.
  2. If you live in a rental and your landlord doesn’t accept credit card rent payments, check out specialized third-party payers such as RentTrack, ClickPayRent, and RentShare that accept funding via credit cards.
  3. There are also third-party services, such as ChargeSmart and Evolve Money, that will make electronic payments on your behalf, and you can fund the payments with a credit card.
  4. Personal financial software, such as Quicken and Mint, can send electronic or paper-based payments to any payee you designate.
  5. If you want to send money to family and friends, consider an electronic wallet third-party payer such as Google Wallet, PayPal, Venmo, and Visa-to-Visa Payments.
  6. You can use Visa or Mastercard gift cards to purchase money orders at Walmart and various grocery stores. In theory those money orders can then be deposited in your account and the money used to pay your bills.

Certain banks have been known to shut down accounts for depositing too many money orders and not all grocery stores will allow you to purchase money orders with these gift cards. The best way to find out your options is to experiment and research.

While you can pay for a money order with a credit card (and sometimes that may be your only option without the cash on hand), these options can help save you money by avoiding high fees and APRs. They can also keep you on top of your payments with the added benefit of automatic withdrawals. So, can you buy a money order with a credit card? Yes, but like I said above, proceed with caution.

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