Can you buy money order with credit card? Suppose you, like many others, have this question in your mind. In that case, Hanfincal (hanfincal.com) wonders why you would ever need to use a money order when you can pay with a credit or debit card, directly transfer payments via apps, and write a personal check, or even pay with actual cash? With the same concerns, let’s learn more about money orders today.
1. What is a money order?
When needing to make a secure payment and being unable or unwilling to use your bank’s online payment options or an online payment app, a money order is an alternative to checks or cash you should consider.
Money orders are a paper form of payment. On the other hand, they differ from personal checks in that their payment is guaranteed and cannot be returned. Furthermore, you can purchase a money order with cash or another form of guaranteed payment.
A government or a banking institution usually issues a money order. It is similar to check-in, and the person who purchased it can stop payment.
You purchase a money order by handing over cash or other guaranteed funds to a cashier and a service fee. They print the order, you fill it out, and you send or give it to whomever you’re doing business with. Even if your money order is stolen, it is unlikely that it will end up in the hands of a thief. However, keep your receipt if your money order is lost or stolen and you need to track and recover funds.
2. How to use money orders?
A money order can be used to pay rent and other bills, send money to family and friends, and even pay for online orders at some groceries. If you prefer, you can cash a money order at your bank or any other institution that issues money orders, but you may be charged a fee of up to a few dollars. Going to the institution that issued the money order will likely result in the lowest fees for cashing a money order.
When depositing or cashing a money order, you must endorse its back in front of the counter agent. You also need to show a government-issued photo ID to cash it. Moreover, do not sign the money order before cashing or depositing it. When a buyer pays for a money order, he or she receives a receipt that includes the money order’s serial number. This information should be kept until the purchaser is confident that the money order has cleared.
The following benefits of using a money order:
- There is no need for a bank account: A money order can be purchased at a post office or from a retailer who accepts other forms of payment.
- Your information is kept secure because a money order contains less personal information.
- The funds are guaranteed: Money orders require payment in advance, so there is no question about whether the order will be returned.
- You can send money to another country using a foreign currency.
- It’s secure. If you’re mailing a payment, a money order with a designated recipient is safer than cash.
3. Can you buy money order with credit card?
You cannot buy a money order with a credit card because doing so entails financial risk and high-interest rates. Furthermore, a money order purchased with a credit card is treated as a cash advance rather than a regular purchase. Therefore, given the additional fees and interest charges will be incurred. There are numerous disadvantages to purchasing money orders with credit cards:
- Higher interest rate: The “cash advance APR” on most credit cards is higher than the purchase APR.
- No waiting period: Cash advances usually begin accruing interest right away. This means the amount you owe will continue to grow from the day you receive the cash advance until you pay it off ultimately.
- Expensive: Cash advance fees are typically set at 5% of the loan amount or $10 for one transaction.
- Not receive any rewards: Cash advances do not earn reward points and are not eligible for minimum spending or other incentives.
4. Can I buy money orders by credit card online?
Many people are interested in online payment because it will be convenient and time-saving. On the other hand, money orders are unique in that they are purchased directly, so you cannot pay for money orders online with a credit card.
With today’s technological advancements, transferring money online is no longer difficult. Consider using money transfer apps like Venmo or Square Cash to send money to friends and family online. Both apps accept credit cards for online payments but keep an eye out for fees. You can send money without paying fees if you use a debit card or a bank account with these apps.
5. Money order alternatives to consider
5.1. Ask if you can pay by credit card
A credit card is not recommended for purchasing a money order, but it can be used to make a purchase directly by swiping. If you need to pay rent, utility, or other bills, you may be able to do so directly with your credit card. Although there are many fees associated with credit cards, using them directly is less expensive than using a money order or cash advance fees and interest.
5.2. Earn extra cash
Selling items you own or taking on a side job could help you quickly free up cash for a money order.
5.3. Get a loan
Finding a suitable loan is no longer unusual for many people. You can access various options with the best interest rates and durations. One thing is sure: these interest rates will be lower than cash advance fees and interest.
According to Federal Reserve data from February 2021, the average personal loan interest rate is 9.46%. That’s lower than the typical cash advance APR. If your credit isn’t great and you can’t get a low-interest loan, consider applying for a secured personal loan or borrowing money from a family member or friend.
5.4. Request a salary advance
This is also a way to get cash with much lower interest or fees, even with no fee than a cash advance. However, before requesting a salary advance, inquire about your company’s policies regarding whether or not interest will be paid on this.
Inquire with your payroll manager about receiving an advance on your next paycheck. Depending on your employer, you may be required to repay it with interest over time or simply miss your next paycheck.
Money orders can be valuable tools for securely exchanging and sending money, but it’s critical to understand how they work and their risks and limitations. If you are asked, “Can you buy money orders with a credit card?” What is your answer? If you forget, reread this article; we’re confident you’ll retain all of our provided information from Hanfincal (hanfincal.com).
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