Can I Buy a Money Order With a Credit Card?

Money orders offer a secure method for sending payments when cash or personal checks are not suitable. These prepaid instruments function similarly to checks but guarantee funds, as the money is paid upfront at the time of purchase. Money orders are widely accepted for various transactions, including paying bills or sending money to individuals who might not have bank accounts. This payment method can provide peace of mind because they can often be tracked and replaced if lost or stolen.

Using Credit Cards for Money Orders

Directly purchasing a money order with a credit card is generally not an option at most retail locations. Places like the U.S. Postal Service, major retailers, and money transfer agents typically do not accept credit cards for money order purchases. Instead, they require payment in cash or with a debit card. If a location were to permit a credit card for such a transaction, it would almost universally be processed as a cash advance by the credit card issuer. This distinction is important because a cash advance is not treated as a regular purchase.

A cash advance involves borrowing money against your credit card’s available credit limit, essentially withdrawing cash rather than making a standard purchase. While it might seem like a convenient way to obtain funds for a money order, credit card companies apply different terms to cash advances compared to everyday transactions. Understanding these terms is essential before considering this method.

Understanding Cash Advances

Cash advances come with financial implications that differ significantly from typical credit card purchases. They are subject to a higher Annual Percentage Rate (APR), often ranging from 25% to over 30%, which is typically several percentage points above the standard purchase APR. Interest on cash advances begins accruing immediately from the transaction date, meaning there is no interest-free grace period. This immediate interest accrual can quickly increase the total cost of the borrowed amount.

In addition to higher interest rates, cash advances incur specific fees. These fees are commonly structured as a percentage of the advanced amount, often between 3% and 5%, or a flat fee, such as $10, whichever amount is greater. Cash advances typically do not earn any rewards points, cash back, or other benefits associated with regular credit card spending. The amount of a cash advance also reduces your available credit, and while it doesn’t directly impact your credit score, increasing your credit utilization ratio (the amount of credit used versus available) above 30% can negatively affect it.

Other Payment Methods for Money Orders

Given the costly nature of cash advances, alternative payment methods are preferable for purchasing money orders. The most common and widely accepted forms of payment are cash and debit cards. When using a debit card, a Personal Identification Number (PIN) is usually required to complete the transaction, similar to an ATM withdrawal. Some locations may also accept traveler’s checks, though personal checks are generally not accepted for money order purchases due to the prepaid nature of money orders.

Money orders can be purchased from various convenient locations across the United States, including:

• U.S. Post Offices
• Many banks and credit unions
• Large retail chains such as Walmart
• Dedicated money transfer agents like Western Union and MoneyGram
• Numerous grocery and convenience stores

Most domestic money orders have a maximum value, typically $1,000, though multiple money orders can be purchased if a larger amount is needed. Fees for domestic money orders are usually minimal, often less than a few dollars, making these options more economical than a credit card cash advance.