Money orders are a safer alternative to cash or a check if you want to send money or make a payment. Money orders can be purchased with cash or a debit card, but some people wonder if they can also buy them with credit cards. The answer technically is yes, however, it could be more trouble than its worth.
Should You Use a Credit Card to Purchase a Money Order?
It is not recommended to use your credit card to purchase a money order. This is because you can't do it directly. You will need to ask for a cash advance which is expensive.
If you do not have cash, it's best to look at other options.
Money Orders: How to Use Them
Money orders are similar to personal checks in that they're a paper document which the recipient can deposit into their bank account or cash. Money orders can be used to pay bills and rent, to send money to friends and family or to make online purchases with certain retailers.
Money orders are preferred in some situations because of a few key differences:
The funds are guaranteed. If you pay with a personal check, your funds are only guaranteed if you have enough money in the bank to cover it. Many merchants will not accept personal checks as payment for goods or services. Money orders are paid in advance, so it's clear whether or not the order will be successful.
No bank account required. No bank account is required.
You can be assured that your information is secure. Personal checks often show the routing and account number, as well as the names of the other account holders. Money orders are a good option if you do not know the person handling your check or if they don't trust them. They contain less personal information.
You can use foreign currency. You can send money abroad by purchasing a money order.
If you are mailing payment, a money order that has a recipient designated is safer than cash. Money orders that are lost or stolen can be replaced at a cost.
Money orders are not free. The U.S. Postal Service can charge up to $2.40 per domestic money order and $49.65 for international money orders plus a processing cost.
Where can you buy a money order with a credit card?
There are no money order providers who accept credit cards as payment. Western Union and 7-Eleven used to accept credit cards, but no longer do. To get a money-order with your credit card you will need to obtain a cash advance at an ATM, a bank branch or via a convenience check linked to your account.
Maggie Germano, CEO and founder of Maggie Germano Financial Coaching, describes a cash advance as a loan taken from the credit line on your credit card. She says that a cash loan may come with additional fees and higher interest rates.
What are the costs of getting a money order with a credit card?
There are also additional fees when you pay for a money-order with a credit card.
Cash advance fee. Cash advance fee. This means that a money order of $1,000 will have a $50 fee added to it. Cash advance APR. Cash advance APR is higher on many credit cards than on purchases. Some cards can charge up to 29,99%. You will usually have a grace of at least 21 calendar days between the date on your statement and your payment due date when you use a credit card. If you pay your credit card balance in full before the due date, there will be no interest charged. Cash advances are not usually eligible for grace periods. The higher APR for cash advances starts to accrue from the date the transaction was made.
Cash advances can be expensive, so it is best to use another method to buy a money order. If you have no other choice but to pay with a more expensive method of payment, then this is the exception. Payday loans or auto title loans may have triple-digit APRs. This makes them more expensive than credit card cash advances.
Credit card companies must apply any excess payment over the minimum to the highest interest rate debt first. If you pay with your credit card for a money order you can save money because your payments will be applied to the debt first. It could also halt your efforts to pay off existing debt.
Alternatives to Money Orders
If you don't want to use your credit card to pay for a bill, or to send money and you do not have enough cash in your checking account or money to cover the money order, you should consider all other options before using it. Consider these options:
You can ask if credit cards are accepted. You may be able to use your credit card to pay for rent, utilities, or any other bills. According to data released by the Federal Reserve in February 2023, the average interest rate on a personal loan is 11.48%. This is significantly lower than the typical APR for cash advances. If you have bad credit and can't get a low-interest rate loan, ask a friend or family member for a short term loan. Germano suggests that you draw up an agreement when asking friends and family for a short-term loan. Pritchard says, "But you should be aware that this can affect your relationship even if the money is repaid as agreed."
Ask for a salary advance. You can ask your payroll manager for an advance on the next pay. You may have to pay the money back with interest over time or miss your next payday depending on your employer. You should ask about the terms and ensure that you won't be negatively affected by the missed payment or the interest.
Consider using apps that offer a paycheck advance, like Dave, EarnIn, or MoneyLion. These may allow you to receive a small sum of money without any fees or interest.
You can get money quickly by selling items or doing a side job.
Pritchard suggests comparing the costs of interest and fees when evaluating your options. Pritchard says that if a cash advance offers the lowest cost, it is a good solution. If you must buy a money-order, make sure to do your research to save money.