Can I Get a Money Order Using a Credit Card?

Money orders serve as a secure and reliable payment method, often utilized when cash is not preferred or a traditional bank account is not available. They provide a guaranteed form of payment, as the funds are prepaid. A common inquiry is whether a credit card can be used to acquire one. Generally, credit cards are not accepted for direct money order purchases.

Why Credit Cards Are Not Accepted

Credit card companies and money order issuers typically classify money order purchases made with a credit card as cash advances. A cash advance is a short-term loan provided by your credit card issuer, allowing you to borrow cash against your credit limit. Unlike standard purchases, cash advances usually incur immediate fees and higher interest rates from the moment the transaction occurs. There is no interest-free grace period, and interest begins accruing on the day of the transaction.

A cash advance transaction typically involves an upfront fee, often a percentage of the amount borrowed, such as 3% to 5%, or a flat fee, like $5 to $10, whichever is greater. The annual percentage rate (APR) for cash advances is significantly higher than for standard purchases, potentially ranging from 25% to over 30%. These structures mitigate the increased risk of providing immediate cash to cardholders.

Issuers implement these policies to prevent circumvention of credit card terms and conditions. Allowing direct credit card use for money orders could enable individuals to convert their credit limit into cash without usual checks and balances, presenting risks like money laundering and fraud. This protects financial institutions from potential losses and ensures credit is used for purchases rather than direct cash acquisition.

Where to Purchase Money Orders

Despite credit cards not being a viable payment option, money orders are widely accessible through various retail and financial establishments. Common locations include post offices, grocery stores, convenience stores, and check-cashing services. Some banks and credit unions also offer money orders to their customers, providing another convenient avenue for purchase.

Payment for money orders at these locations is almost exclusively accepted via cash or a debit card. Using cash provides immediate, verified funds, while a debit card directly accesses funds from your bank account. These payment methods reduce the financial risk for the issuer, as they do not involve extending credit.

Money orders typically have a maximum face value, commonly $1,000 per individual money order, though multiple can be purchased for larger transactions. A small service fee is associated with each purchase, ranging from less than a dollar to a few dollars, depending on the location and amount. This fee covers processing and guaranteeing the payment.

Alternatives for Sending Funds

When a money order is not feasible or a credit card is the primary means of accessing funds, several alternative methods exist for sending money, though they may come with different costs. One option is a cashier’s check, guaranteed by the issuing bank. While usually purchased with funds from a bank account, some banks might process a cashier’s check request by initiating a cash advance from a linked credit card, subjecting the transaction to cash advance fees and interest.

Wire transfers offer another method for sending funds directly from one bank account to another, providing a quick and secure way to move money. These transfers typically incur fees, ranging from approximately $15 to $50 depending on the sending and receiving institutions and whether it is an international transfer. Funding a wire transfer with a credit card would also generally be treated as a cash advance, leading to associated fees and higher interest rates.

Peer-to-peer (P2P) payment applications, such as PayPal, Venmo, or Zelle, provide electronic ways to send money to individuals. Zelle often allows free bank-to-bank transfers, but other platforms like PayPal and Venmo may charge a transaction fee, typically around 2.9% plus a small fixed amount, if funded using a credit card. These digital platforms offer flexibility, but using a credit card for funding will likely result in additional costs.