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What Actually Is a Money Order
Before going in depth of how to buy a Money Order With a Credit Card, first, we must know what is a money order. If you need to make a safe payment but you don’t or can’t use your bank’s online payment options or an online payment app such as Venmo or PayPal, you might consider getting a money order instead.
Money orders must be paid ahead. Some people and companies prefer checks because, unlike checks, which may bounce, this payment is assured of going through.
You must specify to whom you’re making the money order out. If the intended receiver doesn’t cash it, the money order can’t be reclaimed. Due to the requirement of providing ID in person when cashing a money order, you generally aren’t concerned that a thief will obtain access to your money.
Suggested Read: How to Remove Hard Inquiry
Why You Should Use a Money Order
When individuals or small businesses pay rent or buy something expensive, they commonly utilize money orders to pay for it. A few people may require that you pay them using a money order.
To ensure that you are not a victim of identity theft, you should only utilize money orders, which do not contain your bank account information.
Money orders can be used to send money overseas, for example, to family members in another country. Many money order vendors operate branch offices in key cities throughout the globe. Make sure the receiver has a method to cash the money order before buying one to send to another nation.
How Do You Buy a Money Order With a Credit Card?
When using a money order, it is most likely necessary to pay using cash or a debit card. You cannot pay with a personal check because financial institutions require the money available before they issue the money order. As far as locations that accept credit cards for money orders, 7-Elevens and Western Union are the only places you may use your credit card.
Pay attention to whether your credit card provider treats money orders as cash advances. Consequently, when you take out a cash advance, you’ll be charged a fee that’s far more than the one you’d pay for a typical purchase. With credit card purchases, you have a grace period when no interest is charged before the full amount of the transaction has been paid. But in the case of cash advances, interest is charged immediately. Your credit card issuer may charge you $20 or more for a cash advance, in addition to the fees above.
Places Where You Can Buy a Money Order With a Credit Card
Currently, most shops do not allow the use of credit cards in exchange for money orders. Many sources say Western Union and 7-Eleven are money order providers that take credit cards, but we contacted the companies to learn if this is true. You can’t use credit cards to buy money orders or money orders at MoneyGram, Walmart, and the U.S. Postal Service.
A credit card will enable you to obtain a cash advance from your nearby ATM, which you will use to buy your money order.
If a merchant doesn’t take credit cards for money orders, you may be able to use a debit card to buy your order.
Pros of Buying a Money Order With a Credit Card
When purchasing a money order using a credit card, financial experts are unable to find more than a few benefits. Choosing to acquire a money order may provide certain benefits to the individual.
With a credit card, even if the user does not have money, they can pay a small amount.
If there is an emergency, being able to buy a money order using a credit card would be advantageous.
Cons of Buying a Money Order With a Credit Card
It is common that paying using a credit card while using a money order is a losing proposition for the individual. According to financial adviser Michael Sullivan, some of the downsides of this are:
It costs extra. Cash advances add an interest rate of 3% or more, along with a charge of 3% or more. This will make the purchase cost higher than just getting a cashier’s check from a bank.
It is difficult to locate places that will accept credit card payments in the form of a money order. It is just Western Union and 7-Eleven outlets where you may use a credit card to acquire money orders.
Cash advance payments don’t qualify for reward or point offers. This eliminates incentives for future transactions; thus, you will get no discounts or deals.
Payments received on a cash advance have no grace period. In the case of an unqualified cash advance, interest begins accumulating immediately.
Cash advances come with greater costs. Generally, cash advance costs are fixed at $10 or 5 percent of the amount of the cash advance. When you place a $200 money order, you will pay $10, and when you place a $500 money order, you are charged $25.
Fees and accumulated interest on the credit card will take longer to pay off because of the debt.
It is unlikely that your credit card provider will refund you for the money order that you lost when you used a cash advance.
One step to save your money from theft is using a secured credit card like Milestone Gold Card.
You will pay a modest charge from the money order amount if any. The fees for money orders differ depending on the party that issues it; typically, they are around $10. For instance, the price of sending a letter from the post office varies from $1.25 to $1.75, whereas at Walmart, the highest charge is $0.88.
How to Avoid Money Order Scams
A legitimate money order is a secure way to transfer payments. Scam artists have used forgeries of money orders to perpetrate fraud. There can be a week or more until your bank or credit union detects the phony money order, at which time they will promptly withdraw all of your monies. If you have already spent the money, it may be an issue.
To be safe, stay aware of these money order frauds:
Cyber scam: In an online retail setting, an online retailer requires you to utilize a money order as payment. They never give you the merchandise, even after you sent them the money order. Conducting the transaction in person is preferable if you’re utilizing a money order to make a purchase. Because of this, you might receive the merchandise before handing over the payment.
Duplicitous buyer: An eBay scammer sends you a bogus money order in order to pay for whatever you’re selling on the website. You’ve already dispatched the goods before you learn the money order is fraudulent. It’s frequently a caution indication when consumers want you to mail items to a private P.O. box; a bogus money order is sent in payment for a non-refundable security deposit, plus a percentage of the cost. The customer promptly requests a refund, and the reservation is canceled. Before you know that a money order is a scam, you deposit the money order, keep the security deposit, and transfer the balance of the money to them.
Bottom Line
Although credit cards can pay money order purchases, using cash or a debit card is almost always a better alternative. This means that if you buy money orders using a credit card, your credit card company will likely reject the transaction. If absolutely required, you can use a credit card to buy a money order through Western Union. You should only consider this as a last resort, though.
Issuers of credit cards commonly regard money order transactions as cash advances, which can rapidly spiral out of control if the customer has difficulty paying down the advance. Once you make a purchase, interest begins to accumulate. In addition, it earns interest at a greater rate than ordinary purchases.
It is important to pay attention to not increase your credit usage rates as this will have a negative impact on your credit score over time.
Though, credit score could be rebuilt using First Progress Platinum Card, later on.