Where Can I Get a Money Order With a Credit Card?

The Reality of Using Credit Cards for Money Orders

A money order functions as a prepaid payment instrument, similar to a guaranteed check, providing a secure way to transfer funds without needing a bank account. They are often used when personal checks are not accepted or sending cash is unsafe.

While money orders are widely available, purchasing one directly with a credit card presents a complex scenario. Using a credit card to obtain a money order is difficult due to merchant and credit card company policies.

Financial institutions and retailers classify such transactions as cash advances, which involve borrowing cash against your credit limit, differing significantly from a regular purchase. Merchants discourage direct credit card payments for money orders to prevent fraud and avoid facilitating cash advances.

This helps them bypass fees from credit card processors for cash-equivalent transactions. When a credit card is used, even indirectly, for a money order, the transaction triggers immediate financial implications like higher interest rates and cash advance fees.

Where You Might Find Money Order Services

Money orders are available at various locations, though payment acceptance policies differ, especially concerning credit cards. The United States Postal Service (USPS) accepts only cash or debit cards. Major money transfer services like Western Union and MoneyGram, found within grocery stores, convenience stores, and large retailers, require payment with cash or a debit card.

Many large retailers, grocery stores, and convenience stores offer money order services. These locations do not accept credit cards for direct money order purchases, preferring cash or debit cards. Banks and credit unions issue money orders, but limit this service to account holders, accepting payment directly from a checking or savings account, or with cash.

While direct credit card purchases are rare, an indirect method involves using a credit card to obtain a cash advance from an ATM, then using that cash to purchase the money order. The money order itself is still bought with cash, not directly with the credit card. It is always advisable to contact a location beforehand to confirm their payment policies.

Key Details When Purchasing with a Credit Card

When a credit card is used indirectly for a money order via a cash advance, financial implications arise. Credit card companies charge a cash advance fee, a percentage of the transaction amount, ranging from 3% to 5%, with a minimum fee of around $10. This fee applies immediately to the credit card balance.

Interest on cash advances accrues immediately from the transaction date, unlike regular purchases that have a grace period. The annual percentage rate (APR) for cash advances is higher than for standard credit card purchases, reaching 30% or more. The cost of the money order can significantly increase beyond its face value and nominal issuance fee.

Credit card issuers and merchants impose lower daily or per-transaction limits for cash advances or money order purchases compared to regular credit card spending. A large cash advance can impact an individual’s credit score by increasing their credit utilization ratio (credit used versus total available credit). Maintaining a utilization ratio below 30% is generally recommended to avoid a negative impact.

Merchants are cautious about credit card transactions for money orders due to fraud and money laundering concerns. Given these financial costs and credit impacts, using a debit card, cash, or a direct bank account transfer represents a more straightforward and less expensive method for obtaining money orders.