Can I Do a Money Order With a Credit Card?
Learn if credit cards can fund money orders, understand the financial implications, and find accepted payment methods and locations.
A money order provides a secure, prepaid method of payment that functions similarly to a check. It is often used when cash or personal checks are not suitable, offering a reliable way to send or pay money without requiring a bank account for the recipient. Money orders are considered a guaranteed form of payment because the funds are paid upfront to the issuer. This makes them a more secure alternative to sending cash through the mail or using a personal check that could potentially bounce.
Using a Credit Card for Money Orders
Using a credit card to purchase a money order is not permitted by most merchants or credit card issuers. This restriction stems from a money order’s nature as a cash equivalent. Direct purchase would allow obtaining cash on credit without the safeguards and fees of a cash advance.
If a direct purchase is not allowed, some individuals might consider using their credit card to obtain a cash advance and then use that cash to buy a money order. A cash advance is a short-term loan from your credit card issuer, where you borrow cash against your credit limit. This transaction is treated differently from a standard purchase and comes with specific financial implications.
Cash advances typically incur immediate fees, often 3% to 5% of the advanced amount, or a flat fee such as $10. Interest begins to accrue immediately, without the grace period offered for regular purchases. This interest rate is higher than the annual percentage rate (APR) for purchases. Furthermore, a cash advance increases your credit utilization ratio, which can negatively affect your credit score.
Accepted Payment Methods for Money Orders
Several widely accepted payment methods are available for money orders that avoid the complexities and costs of a credit card cash advance. The most common are cash and debit cards. Cash is universally accepted by money order providers, ensuring a straightforward transaction.
Debit cards are also a common payment option, directly accessing funds from your bank account. This offers a secure and convenient way to pay without carrying large amounts of cash. Some locations allow direct withdrawal from a bank account. These methods ensure funds are readily available, eliminating the risk of insufficient funds.
Where to Obtain a Money Order
Money orders are widely available at various convenient locations. The United States Postal Service (USPS) is a common issuer. Many grocery and convenience stores also offer money order services, often through providers like Western Union or MoneyGram.
Some banks and credit unions provide money orders. Dedicated check-cashing services also sell money orders. When purchasing, check the specific policies of the location regarding maximum amounts and accepted payment methods, as these can vary.