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You’re in line at Western Union, about to buy a money order for the security deposit at your new place.
When you finally get to the front, the cashier offers you several payment options, including cash, debit, and credit.
Surprised, you ask yourself: “Can you buy a money order with a credit card? I wonder if it’s a smart move.”
Wonder no further — we have the answer for you below.
Money orders are similar to cash, only more secure because they designate a specific payee.
Since they must be paid up front, they can’t bounce like a personal check, and are therefore a form of guaranteed payment. They also don’t splash your checking account number across the front, which makes them less prone to identity theft.
Money orders are widely available at retail stores and post offices, and usually cost less than $2. They’re a solid way to send money in the mail or pay your landlord — but only if you use cash or a debit card.
When you pay with a credit card, it’s a whole other story.
Because they’re basically like cash, buying a money order with a credit card means your purchase will be coded as a cash advance.
So the answer is yes, some merchants may allow you to buy a cash advance with a credit card, but it can be expensive.
Cash advance fees usually clock in at 5% or $10 — whichever is greater. So, on a $100 money order, you’d pay $10, and on a $500 money order, you’d pay $25.
That’s not all, though. Here are several other things to keep in mind when you purchase a money order with a credit card:
Still convinced you want to buy a money order with a credit card? 7-Eleven and Western Union are the only major providers who will let you.
If you want to buy a money order from other locations, including gas stations, grocery stores, convenience stores, Walmart, Moneygram, and the U.S. Postal Service, you’ll need to do things a little differently.
To use a credit card for money orders at these retailers, you’ll first need to use your card to withdraw cash from an ATM. Then you’ll use the cash to purchase a money order. Note you’ll still pay the same cash advance fees as with the other method, plus ATM fees if you use an out-of-network machine.
Most people purchase money orders when they don’t have a bank account, want to keep their checking account numbers private, or want to avoid sending cash through the mail. In each of these situations, however, a money order isn’t the only option.
Here are a few alternatives:
Although we don’t recommend using credit cards with money orders, a few cards are better choices than the rest.
The following cards don’t charge cash advance fees, and don’t have special (read: extra high!) cash advance APRs.
In addition to the cards below, American Express’ former charge cards may be a good option for buying money orders. Those cards may code money orders as regular purchases. However, the transaction may also be declined, or counted as a cash advance. Your mileage may vary when trying this method.
Whichever card you choose, your APR will depend on your creditworthiness and credit scores. If they’re excellent, you’ll be at the lower end of the APR range; if they’re poor, you’ll be at the higher end. Here’s how to build your scores with credit cards.
With no cash advance fees, a $100 statement credit, and decent rewards, the PenFed Platinum Rewards Visa Signature® Card (Review) is the most attractive option of the bunch. To get any PenFed products, you must be a member of the credit union. PenFed is federally insured by NCUA.
This CapEd Visa® Platinum Credit Card has no cash advance fee — and for those who qualify, it offers a low 4.90% APR for cash advances that are made within the first six billing cycles and paid off in the first year.
If you qualify for the MICU Platinum Visa card you’ll get one of the rates shown above, which are relatively low for cash advances. To join MICU, you’ll need to open a savings account with $5, of which $1 will go to charity.
The American 1 Rewards Credit Card comes in your choice of more than 100 designs, from nature scenes to animals to American flags. Another bonus is it’s serviced in-house, so if you have any questions, you can call — and a real person will pick up after a few rings! To become a member of the credit union, you’ll need to pay $3 to join Community 1 Cooperative.
While we’d never recommend buying a money order with a credit card, you can lessen the cost by choosing a card without high cash advance fees or APRs.
The better option, however, is to use cash for your money orders — and one of the best credit cards for your other shopping needs.
You can buy a money order with a credit card, but it’ll typically be treated as a cash advance, which will likely include a fee and high interest rates.
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