And while money orders are generally always bought using cash, there can be rare instances where you don't have or don't want to carry cash. A question many credit card holders have is if it's possible to use a credit card to buy a money order?
Yes. You can buy a money order with a credit card or a debit card. Some notable examples are Western Unions and 7-11. These money order providers allow you to buy money orders with a credit card.
What is a Money Order?
Money orders are what's known as a "cash advance". As mentioned earlier, unlike checks, a money order is generally much more trusted when purchasing an item. This is because they pride themselves on a form of guaranteed payment. What this means is that they cannot "bounce" or be drawn upon insufficient funds the same way a check can.
The reason for this is that money orders require an upfront cash payment before it is issued. The cash payment must be the full amount (plus tax and other fees) and must be paid immediately and all at once. As a result, there is never a question about a money order validity or ability to be cashed out.
Can You Use a Credit Card to Buy a Money Order?
Yes, you can, but some providers do not accept credit cards. Check the table below.
Popular Money Order Providers Payment Method
Company Name | Accepts Credit Cards? | Accepts Debit Cards? |
WesternUnion | YES | YES |
Walmart | NO | YES |
MoneyGram | NO | NO |
CVS (Uses MoneyGram) | NO | NO |
USPS | NO | YES |
7-11 (Uses WesternUnion) | YES | YES |
Moneytree | NO | NO |
Publix | NO | YES |
Kroger | NO | YES |
While you can use a credit card to buy a money order, it can come at a cost because of the fees you may have to pay. Compared to other credit card fees, cash advance fees are the most expensive. They come at a higher APR(Annual Percentage Rate) because the credit card company does not know where the money is going. More on this later.
Not only that, but, depending on the credit card company and the type of card you have, you may have a lower cash advance set limit compared to your normal spend limit. Depending on many factors, you may even result in having a $0 cash advance limit.
The reason this is brought up, as you can imagine, is that credit cards with a lowered cash advance limit directly impact the amount of money you can put towards a money order. For example, if you have a credit card with an available balance of $25,000, that does not automatically mean you can place $25,000 on a money order. Take that same credit card and give it a $3,000 cash advance. Now you see that, rather than $25,000, you can only put $3,000 towards a money order.
Cash Advance Fees
Another part of the "yes, but" is the fact that, on credit cards, there are cash advance fees associated with the purchase. These fees are separate from the standard taxes and money order fees that are behind every purchase. They will vary from issuer to issuer but are generally either a flat $10 or 5% or more of the transaction price.
This can get quite expensive if looking to use a cash advance money order for something over $1,000. As an example, if you were to receive a money order worth $5,000, you would have to pay around $250 on your credit card's cash advance fees before whatever the taxes and other fees that the merchant may charge. This can easily turn your $5,000 money order into a $5,500 money order.
Interest Rates
Cash advances are notorious for their incredibly high-interest rates as well as lack of a grace period. The lack of a grace period removes any opportunity you may have of avoiding charges.
You also have to worry about paying down the interest on a cash advance at a much higher rate than a normal purchase. Meaning that it's important to pay down your balance in full when using your credit card for a cash advance.
What about Credit Card Rewards?
Unfortunately, this is a direct "no". Whereas standard transactions can at least allow you to accrue some reward points, the same is not true for cash advance transactions. This means, that not only will a $5,000 cash advance cost more than a $5,000 credit card purchase, it will also take more time and money to pay down while not offering you any rewards in exchange.
Will All Merchants Accept Credit Cards?
Not all merchants accept credit cards. Places like the USPS, MoneyGram, or Walmart, as an example, will not accept credit cards as a viable method of payment for a money order.
Two places that do allow a credit card purchase for money orders are 7-Eleven and Western Union.
Conclusion
While purchasing a money order with a credit card is a possibility, many other factors should be considered before deciding to do so. If you are using a money order to pay rent, bills, or some other purchase, check and see if you can directly pay using a credit card instead. Even if you have to deal with a convenience fee, it will still be considerably less expensive (and will likely offer you some rewards) than through a cash advance for a money order.