Who Accepts Credit Cards for Money Orders?

Money orders serve as a secure payment alternative to cash or personal checks, providing guaranteed funds for various transactions. They are frequently used for purposes such as paying rent, settling bills, or facilitating international payments. Money orders are prepaid and function similarly to a check, offering a reliable way to transfer funds without requiring a bank account from either the sender or the recipient. They are typically purchased using cash or a debit card.

Characteristics of Money Order Transactions

Money orders are cash equivalents, meaning funds are guaranteed because they are prepaid. This makes credit card acceptance uncommon for money order purchases.

From a merchant’s perspective, accepting credit cards for money orders involves significant processing fees, typically ranging from 1.5% to 3.5% of the transaction amount. These fees can erode thin profit margins. Merchants also face an increased risk of chargebacks and fraud when credit cards are used for cash-equivalent transactions, as customers can dispute charges, potentially leading to financial losses.

From the credit card issuer’s viewpoint, using a credit card to purchase a money order is categorized as a cash advance. Immediate fees and higher interest rates often apply from the transaction date, without the typical interest-free grace period. This makes using a credit card for a money order an expensive option for the consumer and reduces the incentive for merchants to accept them.

Locations That May Accept Credit Cards

Directly purchasing a money order with a credit card is uncommon, as many major retailers and service providers, including the U.S. Postal Service and Walmart, explicitly state they only accept cash or debit cards. However, some independent money transfer services or smaller, local grocery stores and convenience stores may accept credit cards. Policies can differ significantly even among locations within the same chain, so confirm directly with the specific store.

Online services offer an indirect method for using a credit card for payments that might otherwise require a money order. For example, certain online bill payment platforms, including those offered by MoneyGram or Western Union, may allow credit card payments for bills. While this is not a direct money order purchase, it can fulfill a similar need. Call the location or service provider to verify their current payment policies and inquire about accepted credit card networks like Visa, MasterCard, American Express, or Discover. This differs from using a debit card, which is widely accepted for money orders without incurring cash advance fees.

Fees and Purchase Process

When a credit card is used to acquire a money order, consumers face two main types of fees. The credit card issuer charges a cash advance fee, which is a percentage of the transaction amount, commonly ranging from 3% to 5%, with a minimum fee of around $10. Unlike regular purchases, interest on cash advances begins to accrue immediately from the transaction date, without any grace period, and at a higher Annual Percentage Rate (APR) than for standard purchases. This immediate interest accrual significantly increases the overall cost.

In addition to credit card fees, the merchant selling the money order imposes a small purchase fee. This fee is nominal, typically ranging from $0.70 to $1.50, but can be up to $5 depending on the location and the money order’s value. For example, a money order up to $500 might cost around $2.55 at the U.S. Postal Service. The purchase process involves presenting your credit card, providing identification, and confirming the transaction details. Review your credit card’s terms and conditions regarding cash advances before proceeding, as the combined fees can make purchasing a money order with a credit card considerably more expensive than its face value.