How to Buy a Money Order With a Credit Card

Money orders offer a secure alternative to cash or personal checks. They function as a prepaid payment, ensuring the recipient receives guaranteed funds, unlike a personal check that could bounce. Many individuals seek to purchase these financial instruments using a credit card, often for convenience or to manage cash flow. Understanding the implications of such a transaction is important.

Availability and Restrictions for Credit Card Purchases

Purchasing money orders directly with a credit card is difficult because credit card companies classify these transactions as cash advances, not standard retail purchases. A cash advance involves borrowing cash directly from your credit line, which is treated differently. This distinction carries significant financial implications.

Cash advances accrue interest immediately from the transaction date, without the grace period offered on regular purchases. Interest rates for cash advances are often higher than the annual percentage rate (APR) for standard purchases. Credit card issuers also impose a cash advance fee, commonly ranging from 3% to 5% of the transaction amount, or a flat fee like $10, whichever is greater. These factors make credit card companies and retailers reluctant to accept credit cards for money order purchases due to inherent risks and additional costs.

Where to Purchase

Money orders are widely available at post offices, major retail chains, grocery stores, and financial institutions like banks and credit unions. However, their payment policies regarding credit cards are almost uniformly restrictive. The United States Postal Service (USPS) accepts only cash, debit cards, or traveler’s checks for money order purchases, not credit cards.

Large retailers, such as Walmart, also state that money orders can only be purchased with cash or a debit card. Convenience stores and Western Union or MoneyGram agent locations typically limit payment options to cash or debit. Banks and credit unions generally do not permit direct credit card payments for money orders, aligning with the industry standard classification of such transactions as cash advances.

The Purchase Process and Associated Costs

If a money order purchase is facilitated using a credit card, it almost invariably involves a cash advance. This means you would first obtain cash from your credit card, typically through an ATM or bank branch, and then use that cash to buy the money order. This indirect method incurs multiple layers of costs that significantly increase the total expense.

The money order itself has a nominal fee charged by the issuing location, ranging from under $1 to around $5 for domestic orders, depending on the venue and amount. Beyond this fee, the credit card’s cash advance fee applies, typically 3% to 5% of the amount advanced, often with a minimum charge of $10. For example, a $500 cash advance could incur a $15 to $25 fee.

Additionally, the higher cash advance interest rate, which can be considerably above your standard purchase APR (sometimes nearing 30%), begins to accrue immediately from the transaction date. These combined fees and interest charges make using a credit card for a money order a very expensive option. Checking with your credit card issuer for their specific cash advance terms before proceeding is advisable.