Can You Buy a Money Order With a Card?
Navigate the complexities of buying money orders with cards. Understand which payment methods are viable, where to find them, and the process for a successful purchase.
A money order serves as a pre-paid, guaranteed method of payment, often utilized when cash or personal checks are not suitable. It functions similarly to a check but is prepaid, meaning the funds are secured by the issuing institution and cannot bounce due to insufficient account balances. While credit cards are rarely accepted for purchasing money orders, debit cards frequently offer a viable option for these transactions.
Understanding Credit Card Restrictions
Credit cards are generally not accepted for money order purchases because money orders are considered cash equivalents. Using a credit card for such a transaction is typically categorized as a “cash advance” by credit card issuers.
A cash advance involves borrowing cash directly against your credit limit, rather than making a purchase for goods or services. Cash advances usually incur high transaction fees, often ranging from 3% to 5% of the advanced amount, or a flat fee of around $10, whichever is greater. They also typically have a higher Annual Percentage Rate (APR) than standard purchases, and interest begins accruing immediately from the transaction date, without any grace period.
Credit card issuers and merchants discourage credit card use for money orders due to the heightened risks involved. These risks include potential fraud, money laundering concerns, and the immediate placement of the cardholder into debt for a cash-like transaction. Cash advances can also negatively affect a credit score if they significantly increase a user’s credit utilization ratio.
Debit Card Acceptance and Purchase Locations
Debit cards are widely accepted for money order purchases because they draw funds directly from your linked bank account, operating much like a cash transaction. This direct transfer avoids the cash advance issues and associated fees that come with credit cards. Numerous locations across the United States facilitate money order purchases using a debit card.
The United States Postal Service (USPS) is a common location, offering domestic money orders up to a maximum value of $1,000. USPS fees for domestic money orders typically range from $2.35 for amounts up to $500, to $3.40 for amounts between $500.01 and $1,000. Major retailers, such as Walmart, also sell money orders, often partnering with services like MoneyGram or Western Union. Walmart, for instance, advertises a maximum fee of $1 for money orders, making it a very affordable option.
Grocery stores and check-cashing services also commonly provide money order services, though their specific policies, transaction limits, and fees can vary significantly by chain and even by individual location. While banks and credit unions also offer money orders, they sometimes require an existing account with the institution and may have varying fee structures; some may even waive fees for certain account holders. Money order limits generally range from $500 to $1,000 per transaction, and if a larger amount is needed, multiple money orders must be purchased, incurring additional fees for each. It is advisable to contact the specific location beforehand to confirm their policies, limits, and fees.
The Money Order Purchase Process
To begin the money order purchase, gather all necessary information before visiting a location. You will need the exact amount of money the order should be for, the full name of the recipient, and potentially their address.
Next, proceed to one of the authorized locations, such as a Post Office, a major retailer like Walmart, a grocery store, or a bank. Once there, inform the clerk or customer service representative that you wish to purchase a money order and specify the precise amount.
The clerk will prompt you to present your debit card for payment. Your card will be swiped, and you will be required to enter your Personal Identification Number (PIN) to authorize the transaction. The total amount, which includes the money order’s face value plus any applicable fees, will be debited directly from your bank account. After the transaction is complete, you will receive the money order and a receipt. Inspect the money order to ensure the amount and recipient’s name are accurate, and retain the receipt for your records, as it serves as proof of purchase and can be used for tracking or inquiries.