Buying a Money Order With a Credit Card

Amethyst Tagney  | 

You can pay for money orders in a variety of ways, including a credit card. A money order is a payment similar to a check that has been paid beforehand. A reputable party verifies that you have the funds to back up the money order, leaving no room for doubt of the legitimacy of the order. There are many reasons why you might need a money order in this day and age. You may need to make a payment without a bank, exchange foreign currency, or send money securely by mail.

Money orders are a safer option than cash or checks when you’re mailing money. They work much in the same way as personal checks do in that the only person who can use it is the person you write it out to. However, unlike checks, your checking account number is not printed on the money order, keeping your finances safe from fraudsters and identity theft.

Should You Buy a Money Order With a Credit Card?

While the option is available to purchase a money order with a credit card, there may be some drawbacks. Many card issuers treat money order purchases as a cash advance. It is important to check the policies of your credit card provider before making a money order purchase, as many cash advance transactions are far more expensive, have higher interest rates, no grace period, and may include fees.

Cash advance charges can quickly sink you into debt and may affect the payment of other debts you already have. You may also want to make sure that your cash advance limit is enough for the purchase of the money order.

A cash advance can sometimes hurt your credit score if it raises your credit use ratio to more than 30%. In addition, credit card rewards are often not honored on specific types of purchases, such as buying a money order with your credit card. So the extra money you are paying in interest for your money order is also not being utilized to earn the credit card rewards you may have hoped to gain.

Where You Can Purchase Money Orders Using a Credit Card

Although there are plenty of establishments that offer money orders, there are very few that will accept credit cards. The two more well-known locations that accept credit cards are Western Union and 7-Eleven.

However, both establishments will charge you a separate fee from the fees you will have to pay your credit card company to use your credit card. It will cost you close to $12 for money orders that amount to $100 if you go with Western Union. Charges differ as the amount of your money order goes up or down.

If you choose to go with 7-Eleven, it will cost between $1 to $5 depending on how much the money order is. To get around the lack of locations, you can withdraw cash from an ATM to purchase a money order with your credit card. Your selection of establishments to choose from then widens greatly to include:

  • Walmart with a maximum fee of 88 cents;
  • USPS with a cost of $1.20 for money orders up to $500 and a $1.60 fee for orders up to $1,000;
  • Banks with a fee of $5 for money orders less than $1,000.

Alternatives to Buying a Money Order  

If you are unable to acquire a money order through your credit card, there are many other viable options that are left for you to explore. When it comes to paying your bills, many companies give you the choice of scheduling automatic payments from your checking account.

If you don’t have a checking account, third-party services will be your next best bet. Services like Plastiq and PlacePay will allow you to pay bills and rent with your credit card, even when it was previously stated that credit cards are not accepted.

You can also look into money-transfer services such as PayPal to get around a landlord’s no credit card policy. PayPal can be used as a safe way to give money to people as well. Instead of sending money to people by mail, you can electronically send it to them with a money-transferring service.

Even though you can buy money orders with credit cards, this option should not be chosen lightly. If you can even find a business that accepts credit cards for money orders, multiple fees and high-interest rates will make this purchase more expensive by the minute.

Image Source