Yes, I use loaded debit cards to buy money orders in Walmart to complete minimum spending but we also buy groceries and merchandise in Walmart. Both my printers came from Walmart and my wife’s medicines come from Walmart’s pharmacy. The guy in the food chain who wants to cut out money orders with loaded debit cards is driving customers to.
A money order is a safe way to send money through the mail or to make payments to companies that have limited payment options. But, if all you have is a credit card, you're probably wondering whether you can even use it to buy a money order.
Buying a Money Order With a Credit Card
You can buy a money order with a credit card, but it's not the smartest or least expensive option. Even though credit card issuers allow you to purchase money orders, there are some drawbacks that are important to consider.
Money Order Purchases Are Treated as Cash Advances
Because money orders are a type of guaranteed payment instrument that requires upfront cash, credit card issuers treat them as a cash equivalent transaction. These transactions are handled the same as a cash advance. Check out your credit card agreement and you'll see the ways that cash advance transactions are far more expensive than purchases and even balance transfers.
Credit card issuers occasionally set a lower cash advance limit and in some cases, it might even be $0. This impacts the amount of the money order you can purchase. Check your available cash advance limit to be sure you have enough room for the amount you need, especially if you already have a balance on the credit card you want to use. Your credit card issuer may not let you go over your limit, even if you've opted-in to having over-the-limit transactions processed.
Consider the cash advance fee before purchasing a money order with a credit card. The fees vary by credit card issuer, but are usually the greater of 5 percent of the transaction or $10. If you're getting a cash advance for a large amount, for example, to pay your rent, the cash advance fee could get expensive. For example, you'd pay a $50 fee on a $1,000 cash advance. And that's on top of any money order purchase fee the merchant charges. The fees can make buying a money order with a credit card very expensive.
Like cash advances, the money order purchases will have a high interest rate and no grace period. The absence of a grace period eliminates opportunity to avoid a finance charges as you could with regular purchases. Since cash advance interest rates are higher than the rates for purchases the interest paid on a money order purchase higher than a regular purchase of the same amount.
You can save on interest with a money order purchase by paying your balance off as quickly as possible - even before the due date.
If you have another balance on your credit card, paying off the expensive money order will be tricky. The minimum payment will always go to the balance with the highest interest rate, which will be your money order. The credit card issuer chooses how to apply anything above the minimum and that will typically be the lower interest rate balance. The result is that your money order balance (the most expensive one) goes down slowly because it's accruing so much interest.
No Credit Card Rewards on Money Order Purchases
If you were hoping to rack up a lot of rewards by buying money orders with your credit card, you're out of luck. Credit card issuers don't pay rewards on cash advances or cash equivalent transactions (or balance transfers) which makes your money order purchase ineligible for rewards.
Finding a Merchant Who Accepts Credit Cards for Money Orders
While credit card issuers will allow you to purchase a money order, many money order seller do not accept credit cards as a form of payment. That includes Walmart and the United States Postal Services. Western Union and 7-Eleven are currently two places that you can buy a money order with a credit card.
Some merchants will allow you to purchase money orders with a debit card, but only when you use a PIN. In a pinch, you can use your credit card to withdraw cash from the ATM and then purchase the money order. You'll pay the same fees and interest, but you'll have flexibility in purchase the money order.
If you're purchasing a money order to pay bills, check with the biller to see whether you can pay them directly with a credit card. You may have to pay a convenience fee, but it will likely be much less expensive than using your credit card to buy a money order.
Yes, you can buy a money order with a credit card and you can also use cash, check or a debit card to purchase a money order. Banks and credit card issuers view this as a cash advance which can make it an expensive purchase that includes a fee depending on the amount of the money order.
Why Should I Use a Money Order?
A money order is an easy prepaid alternate form of payment to send money through the mail or to use instead of cash or a check. Money orders also can be used to avoid sending a large amount of cash through the mail which is not the best choice to make.
If you don't have a bank account you can use a money order to make a payment. Money orders also alleviate any identity theft concerns of sharing a personal check with someone as they can't see your bank account number.
How Do You Fill out a Money Order?
You can fill out a money order the same way you write a check. Once you confirm the amount you need the money order for, you fill out your contact information on the front of the money order along with the contact information for the person who will receive the money order.
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Just like a check you can write in what the money order is for if you want to note that. Once all the information is added, you sign the front of the money order and then send it or give it to the intended person or business.
Where Can I Buy a Money Order?
You can buy money orders at several places these days like the Post Office, grocery stores, retail stores, banks, credit unions, check cashing stores and more. Money orders require a fee that you pay upfront when you purchase a money order based on the amount you need it for.
The fees can vary from places like Chase Bank or Wells Fargo, the Post Office or you can buy money orders at stores including Rite Aid, 7/11, Publix, Walmart, Meijer, Albertsons, Kmart, CVS, Kroger, Fred Meyer, MoneyGram or Western Union. The fees can range from as little as $.60 to nearly $2 so it pays to compare prices. You can't buy money orders online yet as issuers want purchases to be made in person.
How Do You Cash a Money Order?
You can cash a money order the same as a check by signing the back of it and taking it to a bank, credit union or check cashing store. You can also take it to the same place it was issued from such as the Post Office, Western Union, MoneyGram, Amscot or even Walmart.
You have to endorse a money order just like you do for a check by signing the back of it and showing the proper identification. If you don't have a bank account you can try to go to the same places above or where the money order was issued.
Do Money Orders Expire?
No, money orders do not expire. However, depending on the state you purchased the money order in and where the money order was purchased there could be a cost to cash it if you wait too long.
This can be the case if you don't cash the money order within 1-3 years of the purchase date it could get reported to the state and considered to be abandoned property or unclaimed money. The US Post Office had more than $26 million a year in uncashed money orders in 2016.
Make sure to read the conditions described on the back of the money order listing any possible service charges. Any cost charged to cash your money order will come out of the total amount of the money order.
If you know that you won't be cashing a money order for a while then you should consider purchasing your money order from the Post Office as they will never expire from there. You can also visit the place that issued the money order and ask what their rules are when it pertains to cashing an older money order.
Money orders are a fairly inexpensive alternate payment option and still popular. The US Post Office reported that over 6 million American households purchased about 100 million money orders with a face value of roughly $21 billion in 2015.
Before you purchase a money order, make sure you understand the pros and cons and choose an issuer that fits your financial needs best.