Can I Buy a Money Order With a Credit Card?

Money orders serve as a secure payment method, functioning similarly to a prepaid check. They are often utilized for paying bills, sending money where traditional checks or cash might not be practical, or by individuals who do not have a standard checking account. Money orders offer a reliable way to make payments because the funds are guaranteed upfront by the issuer. The core question regarding their purchase with a credit card is generally not straightforward.

Why Credit Cards Are Typically Not Accepted

Financial institutions and merchants typically do not allow money order purchases with credit cards because these transactions are classified as cash advances. A cash advance involves borrowing cash directly against a credit limit, posing a higher risk for the issuer. Interest on cash advances usually begins accruing immediately without a grace period. Merchants also avoid these transactions due to high processing fees, which would significantly reduce their profit margin. Furthermore, allowing credit card purchases for money orders could enable activities like credit card cycling or money laundering, increasing risk for financial entities.

Where You Might Encounter Acceptance

Most major vendors explicitly state they do not accept credit cards for money orders, though limited exceptions might exist. The U.S. Postal Service, for instance, only accepts cash or debit cards for money order purchases. Similarly, large retailers such as Walmart, MoneyGram, and many grocery and convenience stores restrict payment to cash or debit cards. Even if a location, such as certain Western Union or MoneyGram agents, were to process a credit card for a money order, the transaction would almost certainly be categorized as a cash advance. This means the financial implications for the cardholder remain substantial.

The Cost of Using a Credit Card

Using a credit card for a money order, if permitted, incurs significant financial costs because the transaction is treated as a cash advance. Credit card companies levy a cash advance fee, often 3% to 5% of the transaction amount, or a flat fee around $10, whichever is greater. Cash advances are subject to a higher Annual Percentage Rate (APR) compared to standard credit card purchases. Interest begins accruing from the transaction date, with no interest-free grace period. A high cash advance balance also increases credit utilization, which can negatively affect an individual’s credit score.

Safer Payment Options

Several alternatives exist for purchasing money orders or transferring funds without incurring the high costs associated with credit card cash advances.
Using a debit card is widely accepted for money order purchases, as it directly draws funds from a bank account, bypassing cash advance issues.
Cash remains the most straightforward and universally accepted payment method for money orders.
For sending money without a money order, direct bank transfers or online bill pay services offer secure electronic options.
Peer-to-peer (P2P) payment applications, such as Zelle, PayPal, and Venmo, are convenient for smaller, informal transfers, often with no fees if funded from a bank account.
Prepaid debit cards provide an alternative for individuals who prefer not to use their primary bank account or do not have one.