Can You Buy Money Orders With A Credit Card?
You can pay for money orders in a variety of ways, but the real question is: can you buy a money order with a credit card? Although the answer is yes, it may be treated as a cash advance, leaving you to wonder if this option is truly worth it.
There are many reasons why you may need a money order in this day and age. Even now, not all establishments accept personal checks or credit cards, requiring cash you may not have upfront. This becomes especially worrisome when you cannot pay your utilities or rent with these forms of payment either.
Also, with around 10,000 mail theft arrests made each year according to the United States Postal Service, it’s enough to make anyone wary about sending money through the mail. When you’re in these kind of situations, money orders can be of great help. When regular forms of payment are not accepted, money orders usually do the trick.
They’re also a safer option than cash or checks when mailing money. Money orders 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 thieves and credit card fraud.
So what exactly are money orders? Essentially, they’re a payment that has been paid beforehand. A reputable party verifies that you have the funds to backup the money order, leaving no room for doubt of the legitimacy of the order. However, should you use your credit card to buy one? Read on to find out.
Can You Buy A Money Order With A Debit Card
Buying Money Orders with Credit vs Debit
Before we get into credit cards any further, let’s talk about debit cards. As mentioned before, there are multiple ways one can purchase a money order, and one of those ways is with a debit card. As long as participating locations have a card reader you’re good to go.
Debit cards have less restrictions than credit cards when it comes to buying money orders, making them a more preferred method. Since debit card transactions with PIN directly takes money from your bank account, there are less fees associated with this form of payment.
The way a debit card functions makes it easier to purchase a money order and guarantee its payment to the recipient. No extra steps are needed to do this. Buying money orders with credit cards, although possible, is an another matter altogether.
Why You Shouldn’t Buy Money Orders With Your Credit Card
Credit Card Fees for Money Orders
Although using a credit card to buy money orders may seem like a good idea at first, it can hurt you more in the end than help. First of all, there are fees to consider when using this form of payment. Since using a credit card to purchase a money order is considered a cash advance, you will have to pay the fees associated with cash advances.
This is because money orders need the money beforehand to make it a guaranteed form of payment. Additionally, you’ll have to check the cash advance limit of your credit card to see if you can even buy a money order to begin with. If your cash advance limit is able to cover the money order amount you would like, there are more fees to come.
Cash advances come with a high interest rate as well and will always cost you something no matter how quickly you pay if off since there is no grace period. This can quickly sink you into debt and may affect the payment of other debt you already have.
Money Order Purchases Won’t Earn Credit Card Rewards
If that doesn’t deter you, money order purchases won’t earn credit card rewards either. Since cash advances are not eligible for rewards, money orders get the same treatment. It can be tempting to use credit cards as a first choice method of payment because of rewards, but it is important to understand that some transactions aren’t technically “purchases” and therefore aren’t counted for rewards purposes.
As you can see, while it is technically possible, there is very little benefit to buying money orders with a credit card unless you have no alternative.
Where You Can Purchase Money Orders Using A Credit Card
If you decide that purchasing a money order with a credit card is your best option, you’ll still be hard pressed to find a location that will let you. 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 to purchase a money order with your credit card from an ATM. You’re selection of establishments to choose from then widens greatly to include:
- Walmart with a fee of 70 cents for money orders up to $1,000
- 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 RentShare will allow you to pay bills and rent respectively with your credit card, even when it was previously stated that credit cards were 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.
That being said, it’s advised to find an alternative to money orders, such as third-party and money-transfer services, or even just paying for the money order with a debit card. Whatever you decide to do, educate yourself on the costs and benefits to make sure that what you decide is best for you and your finances.
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This post was updated January 3, 2018. It was originally published January 5, 2018.