credit card advice
Let’s face it, no one wants to stuff cash in an envelope and mail it, and some folks don’t like to send regular checks because they don’t want to reveal their checking account number — this is where a money transfer can offer a solution.
You can buy a money order with cash, a debit card, a check, and via a bank transfer. You can also pay with a credit card at select locations, but as we’ll explain, it’s probably not your best choice.
You Can Purchase With a Card, But You’ll Pay High Fees
Select locations allow you to purchase a money order with a credit card, but there are a few things to be aware of, such as high fees.
Credit Issuers Treat Money Orders as Cash Advances
Credit card companies treat money order purchases as cash advances. The reason for this is that issuers don’t want you to evade the cash advance interest by sending yourself a money order paid for by your credit card. As you may know, credit card cash advances come with a high interest rate and an additional fee. The interest charges kick in right away, so unless you repay it immediately, you’ll be spending extra money for the privilege of sending a money order.
So let’s assume that using a credit card is your only option. The average credit card charges a cash advance fee between $10 and $20, and an interest rate 1-7 percent higher than your standard purchase rate. Of course, if you planned to repay the cash advance right away, you’d probably use cash to buy the money order in the first place!
Not All Locations Accept Credit Cards as Payment
MoneyGram, Walmart, the USPS and Moneytree do not accept credit card payments for money orders. However, these two money order providers do:
- Western Union charges you $11.95 for a $100 money order purchased with a credit card. Charges vary with the money order amount.
- 7-Eleven charges $1 to $5, depending on the amount of the money order.
You can also buy money orders at your local bank. Alternatively, your bank will prepare a certified check for you. In either case, payment is via your bank account or cash, but not credit cards unless you first take a cash advance.
5 Cost & Card-Friendly Money Order Alternatives
There are several card-friendly alternatives to money orders:
- Many payees, such as utilities, insurance companies, rental agents and cellular providers accept online bill payments directly from your checking account, and you can set up regular automatic payments if you like.
- If you live in a rental and your landlord doesn’t accept credit card rent payments, check out specialized third-party payers such as RentTrack, ClickPayRent, and RentShare that accept funding via credit cards.
- There are also third-party services, such as ChargeSmart and Evolve Money, that will make electronic payments on your behalf, and you can fund the payments with a credit card.
- Personal financial software, such as Quicken and Mint, can send electronic or paper-based payments to any payee you designate.
- If you want to send money to family and friends, consider an electronic wallet third-party payer such as Google Wallet, PayPal, Venmo, and Visa-to-Visa Payments.
While you can pay for a money order with a credit card (and sometimes that may be your only option without the cash on hand), these options can help save you money by avoiding high fees and APRs. They can also keep you on top of your payments with the added benefit of automatic withdrawals. Whatever you decide — best of luck!