Can You Buy a Money Order With a Credit Card?

Susan Shain

Susan Shain | Blog

Oct 22, 2018

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.

How Money Orders Work

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.

Can You Buy a Money Order With a Credit Card?

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:

  • You’ll pay a higher interest rate: Most credit cards have a “cash advance APR” that’s higher than the normal purchase APR.
  • There’s no grace period: Unlike most credit card purchases, cash advances start accruing interest immediately. That means you’ll likely owe more money in fees each day after the day of the cash advance, until you’ve paid it off.
  • You won’t earn rewards: Cash advances don’t earn points, and won’t help you meet a minimum spend or snag a free vacation.
  • It might be tough to pay off: When you make the minimum payment on your credit card, your card issuer chooses where to allocate it — and it’ll probably be to your lowest-interest debt. So if you’re already carrying a regular purchase balance on a particular card, the minimum payments won’t help you pay down your cash advance (and in the meantime, it’ll accrue significant interest). Any amount paid over the minimum, however, usually goes to the highest APR — which would likely be your cash advance.

How to Buy 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.

4 Alternatives to Money Orders

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:

  • Pay bills or rent with a credit cardTry Plastiq, an online service that lets you pay any bill with a credit card for a 2.5% fee. 
  • Send money domestically: Use online platforms like Venmo or PayPal, both of which allow you to fund your transfer with a credit card for around 3%. Or, if you have the money in your checking account, use your bank’s bill pay service.
  • Send money internationally: If your recipient doesn’t have access to the American platforms, you can use Revolut or TransferWise (fees depend on the type of currency, but are generally lower than money orders).
  • Pay a stranger for a large purchase: Say you bought a new car on Craigslist. If you’re afraid of giving the seller a check or cashier’s check with your information on it, you could pay through one of the online platforms above. Or you could purchase a money order with your debit card. (If you don’t have the money in your bank account, then maybe think about whether you really need that item after all!)

4 Best Credit Cards for Money Orders

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, charge cards from American Express may be a good option for buying money orders. Since charge cards don’t have a cash advance APR, they may code money orders as regular purchases. However, the transaction may also be declined. 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.

  • Annual fee: $0
  • Introductory bonus: $100 statement credit when you spend $1,500 in the first 90 days
  • Rewards: 5X points per dollar on gas; 3X points on groceries; 1X point on everything else
  • Perks: No foreign transaction fees
  • Purchase / cash advance APR: 11.49%–17.99% Variable

With no cash advance fees, a $100 statement credit, and decent rewards, the PenFed Platinum Rewards Visa Signature Card is the most attractive option of the bunch. To use PenFed, you must be (or be related to) a government employee or member of the armed services. You can also become a member by paying $17 to join the National Military Family Association or Voices for America’s Troops.

 

  • Annual fee: $0
  • Rewards: 1X ScoreCard Rewards point per dollar
  • Purchase / cash advance APR: 4.90% for 12 months (even for cash advances!); after that, 7.59%–17.99%. For those who don’t qualify for the introductory rate, the APR is 17.99%.

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.

 

  • Annual fee: $0
  • Rewards: 1X ScoreCard Rewards point per dollar
  • Purchase / cash advance APR: 8.99% or 9.99%

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.

 

  • Annual fee: $0
  • Rewards: 1X ScoreCard Rewards point per dollar
  • Purchase / cash advance APR: 9.49%–18.00% Variable

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.

Wrapping Up

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.

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