Can you buy a money order with a credit card?

Money orders offer a secure way of sending and receiving money, but can you buy one with a credit card?

Money orders can be a convenient solution for making and accepting payments when cash, checks, credit or debit cards, wire transfers or prepaid cards just won’t cut it. They’re easy to buy and cash, and they’re available at more than 200,000 U.S. locations.

If you’re in need of a money order, it’s important to understand the potential drawbacks of using a credit card to purchase one. While it may be convenient to use a credit card to purchase a money order, it’s not always advisable or even possible. And it could have a significant impact on your finances.

Whether you’re sending a payment to a friend or business, understanding the benefits of money orders and the different ways to buy them can help you make an informed decision.

What is a money order?

A money order is a certificate similar to a check that allows the recipient to receive an immediate cash payment from a bank or other financial institution. It’s printed with both the payee’s name and the issuing financial institution’s name, making it difficult for anyone other than the payee to cash.

Money orders are paid for in advance, and the issuer guarantees that the payee will receive the exact amount stated on the certificate. They can be purchased with cash, a debit card, or in some cases, a credit card, and they can be replaced if lost.

Money orders are a popular way to make medium-sized payments in circumstances where cash or personal checks are not practical. The sender can purchase the money order at one financial institution and the recipient can cash it at another, or even at the same institution.

Money orders do have certain limits. For example, you can only buy a money order of up to $1,000 through the U.S. Postal Service. However, the rules for how much you can purchase a money order for, as well as how many you can buy, vary widely from store to store.

They can also be used fraudulently. According to Experian, money order scams are common. If you accept a money order for a payment and it turns out to be fraudulent, you’re out of luck.

How and where to buy a money order

To purchase a money order, you must pay the face value of the order along with the issuer’s fee and provide your name, address, the payee’s name, the amount, the date of purchase and your signature.

Money orders can be purchased from a variety of locations, including:

• Banks
• Credit unions
• Western Union or MoneyGram locations
• U.S. Postal Service locations
• Convenience stores
• Drugstores
• Supermarkets and grocery stores
• Payday lenders
• Check-cashing stores

Is it possible to buy a money order with a credit card?

Most providers do not accept credit cards for money order purchases and, if they do, the credit card issuer will typically treat it as a cash advance. This means the purchase will cost you more with higher fees and interest rates. You may not collect rewards on the purchase, and your spend likely will not count towards any minimum introductory offer spend for a credit card sign-up bonus.

Buying a money order with a credit card is not recommended. Credit card companies typically charge more interest for cash advances than regular purchases. And, since a cash advance doesn’t have a grace period, the interest will begin to accrue immediately.

Your issuer may also charge a fee for the cash advance. And if you’re carrying a balance on your card, future payments may be applied to the purchase balance instead of the cash advance balance.

Taking a cash advance can also hurt your credit score if it raises your credit utilization ratio to more than 30 percent. Credit utilization is the second most important scoring factor under FICO’s traditional model, accounting for 30 percent of your score.

If you need to purchase a money order, you might consider using cash, a debit card or making a transfer from a checking or savings account instead of using your credit card.

Money order alternatives

Alternatives to money orders include certified and cashier’s checks, which offer added security and protection against insufficient funds. Like money orders, they’re essentially personal checks with added security features such as watermarks, security threads, color-shifting ink and special paper. Since they’re often used for large-dollar transactions, they come with a higher cost than personal checks due to the added security.

Wire transfers and peer-to-peer payment apps are also secure and convenient ways to send money, and the recipient can usually access the funds within minutes. While the fees for wires can be steep — averaging $26 for transfers within the U.S. — they’re an attractive choice for situations in which a larger sum of money needs to be sent urgently and securely, such as in a real estate transaction. Peer-to-peer payment apps such as Venmo may also charge a fee if the recipient wants to access cash right away rather than wait a few days.

Bottom line

Money orders can be a convenient way to send money, but it is not always advisable or even possible to purchase them with a credit card. Consider the risks and other payment options before deciding to use a money order.