Can You Pay for a Money Order With a Credit Card?
Learn if credit cards fund money orders, the associated costs, and practical payment alternatives.
A money order functions as a secure, prepaid payment method. It serves as a reliable way to send money, particularly when a bank account or personal check is not a viable option. Essentially, a money order acts as a guaranteed form of payment, similar to cash, offering a paper trail for the transaction.
Credit Card Use for Money Orders
Using a credit card to purchase a money order is generally not permitted by most vendors, including major financial service providers and retail locations. This restriction stems from how credit card issuers categorize money orders. Since a money order represents a direct transfer of funds, it is treated by credit card companies as a “cash advance” rather than a standard purchase.
A cash advance carries immediate financial implications that differ significantly from typical credit card transactions. Interest begins accruing on the advanced amount from the moment the transaction is posted, with no interest-free grace period. Furthermore, the interest rates applied to cash advances are typically higher than those for regular purchases, often by several percentage points.
In addition to immediate interest, cash advances incur specific fees. Credit card issuers commonly charge a cash advance fee, which is often a percentage of the transaction amount, typically ranging from 3% to 5%, or a flat fee, such as $5 or $10, whichever is greater. Engaging in cash advances can also affect one’s credit utilization ratio, potentially impacting credit scores if the advanced amount is not repaid promptly.
Accepted Payment Methods for Money Orders
Several payment methods are widely accepted for purchasing money orders. Cash is the most common and straightforward method, allowing for instant processing of the money order. This method is universally accepted at all locations that issue money orders.
Debit cards are another broadly accepted payment method for money orders. Transactions made with a debit card draw funds directly from a linked bank account, similar to a cash transaction. This direct transfer of funds ensures the payment is secure.
In some instances, particularly with online services or specific financial institutions, direct debits from a bank account may be an option. Traveler’s checks might be accepted by some vendors, though their use for money order purchases has become less common over time. Personal checks are rarely accepted for money order purchases due to the inherent risk of insufficient funds. If a vendor does accept a personal check, they may impose a waiting period, typically 5 to 10 business days, to ensure the check clears before the money order is released.
Purchasing Money Orders
Money orders can be purchased from various locations across the United States. The United States Postal Service (USPS) is a widely accessible option, offering domestic money orders with a maximum value typically set at $1,000. Many banks and credit unions also provide money order services.
Retailers and grocery stores, including large chains like Walmart and locations operating under services such as Western Union or MoneyGram, are common places to acquire money orders. These locations often have varying limits and charge a small fee for the service. Fees for purchasing a money order generally range from under a dollar to a few dollars, depending on the location and the amount of the money order.
To purchase a money order, the buyer typically needs to provide the recipient’s full name and address. The desired amount of the money order must also be specified at the time of purchase. After payment, the purchaser receives the completed money order and a receipt. It is important to retain this receipt, as it contains tracking information that can be valuable if there are any issues with the money order.