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Is Buying a Money Order with a Credit Card Worth the Extra Cost?

Can You Buy a Money Order with a Credit Card? Are you looking for a safe and secure way to pay for things without using cash or having access to a traditional bank account?

Money orders are an excellent option, especially if you’re concerned about personal safety when carrying large amounts of cash. However, you may be wondering whether you can use your credit card to purchase a money order.

In this article, we’ll answer that question, discuss the cost and drawbacks of buying money orders with credit cards and offer alternatives.

Buying a Money Order with a Credit Card

The answer is yes; you can purchase a money order with your credit card, but the availability is limited. Money orders are typically available at financial institutions, such as banks and credit unions, and retail stores such as Walmart, 7-Eleven, and Western Union.

You should, however, note that not all vendors accept credit cards for money orders, and you may have to pay more for the convenience of using a credit card.

Availability of Buying Money Order with Credit Card

7-Eleven: According to 7-Elevens FAQ on money orders, they accept cash, debit cards, and credit cards as payment. They state that you can only use credit cards issued by Discover, Mastercard, or Visa.

Western Union: Western Union issues money orders and accepts credit cards for payment. They do require identification, and you may have to pay additional fees, depending on the transaction value.

Cost of Buying Money Order with Credit Card

Cash Advance Fee: If you choose to pay for a money order with your credit card, your issuing bank may classify the transaction as a cash advance. This classification might trigger a cash advance fee, which is usually a percentage of the transaction amount.

Cash Advance APR: In addition to cash advance fees, you will also accrue interest charges on your cash advance. These interest charges can vary from bank to bank, but the average APR is around 24%.

There is no grace period for cash advances, so interest charges begin accumulating when the cash advance posts to your account. Refund: If you buy a money order with a credit card, keep in mind that most vendors wont accept returns or issue refunds if you change your mind or lose the money order.

If you have a problem or discrepancy, you’ll need to contact the vendor or issuer and request a refund.

Drawbacks of Buying a Money Order with Credit Card

Despite the convenience of buying money orders with a credit card, there are several drawbacks regarding cost that you should consider before moving forward.

Expense of Buying Money Order with Credit Card

Expensive: Money orders are relatively inexpensive when compared to other financial products like personal checks or bank drafts. Still, when you purchase a money order with a credit card, you may have to pay additional fees that hike up the cost of the transaction.

Fees: You may incur fees for using your credit card as payment, or there may be an additional fee for purchasing a money order with credit card that is not present when using cash. High APR: If your credit card issuer considers buying money orders a cash advance, interest charges typically accrue at a very high APR.

Alternatives to Buying Money Order with Credit Card

Loans: Personal loans are an alternative to using credit cards to purchase money orders. They generally offer lower APR and don’t entail fees.

They may, however, have higher creditworthiness requirements than credit cards. 401(k) Loan: You can withdraw money from your 401(k) account without penalty or incurring interest if you repay the loan within 5 years.

Conclusion

Buying money orders with a credit card is possible, but the drawbacks and additional fees have to be taken into account. These fees can make the use of credit card less advantageous if you were to buy money orders frequently.

You may, therefore, have to consider other alternatives such as personal loans or 401(k) loans, which may be a lesser expensive option for you. In any case, always compare the cost and benefits associated with each option to get a clear picture of what works best for you.

Final Consideration When Buying Money Order

If you are looking for a safe and secure way to send money, then purchasing a money order is an excellent option. It’s easy and inexpensive, plus, you won’t have to worry about lost or stolen money because the recipient gets the money order.

While some locations allow you to purchase money orders with a credit card, it is important to consider the drawbacks of this payment method and alternative options available to you.

Buying Money Order Using Credit Card as a Last Resort

Buying a money order using a credit card should be the last resort because of the additional fees involved. Most vendors and issuers that offer money orders require payment using cash or debit card.

In cases where you have no other option and need to use a credit card, the transaction is often classified as a cash advance, and you may incur cash advance fees and high interest rates even when you have a good credit score. Alternative Options: There are many alternative options to credit cards when it comes to buying money orders.

Consider using bank transfers or even money transfer apps that allow you to send money. Bank transfers do require you to have a bank account, but they may have fewer fees compared to credit cards.

If you’re going to send a small sum of money, you can also consider online payment systems such as PayPal or Venmo.

Understanding the Costs Associated With Buying a Money Order with Credit Card

When purchasing a money order, it’s essential to carefully read and understand the fee schedule, especially when using a credit card. Besides the cash advance fees at the time of purchase, a money order issuer’s interest rates can be as high as 24% (depending on the credit card issuer).

Therefore, before purchasing a money order, use a credit card as a payment method, ensure that you are entirely aware of the costs associated with the transaction. Costs: When purchasing a money order with a credit card, you will be charged fees similar to that of a cash advance.

In some cases, the fees can add up to around 3% of the total amount. However, some vendors might charge an additional flat fee that goes up to $10 per transaction.

Surprises: Sometimes when using credit cards to buy a money order, you may be in for some unpleasant surprises. It’s important to note that the issuer or vendor may have limits of up to $1,000 per day for credit card transactions.

This limit may be inconvenient if you have to send a large sum of money, and the fees on credit card purchases generally increase with the transaction amount. It is necessary to be informed and aware of the vendor’s limits and fees when making transactions with a credit card.

In conclusion, a money order is an alternative to sending cash or making a check payment. While credit cards offer convenience and security, purchasing a money order via credit card should be the last resort.

With the availability of alternative options such as money transfer apps and online payment systems that require minimal fees, you should always consider all available options before making a payment using a credit card. Moreover, ensure you understand all the costs associated with purchasing a money order with a credit card.

By doing so, you can make an informed decision and avoid unpleasant surprises. Money orders are a secure and efficient way to send and receive money without worrying about lost or stolen funds.

While some vendors accept credit cards as a payment option, there are drawbacks to this method, including additional fees and the transaction being classified as a cash advance. It’s essential to understand the costs associated with buying a money order with a credit card and consider alternative payment methods before resorting to using credit cards.

Options such as bank transfers, money transfer apps, and online payment systems might have fewer fees. By being informed and aware, you can make an informed decision and avoid unpleasant surprises.

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