By Elliot M. Kass | American Express Credit Intel Freelance Contributor
4 Min Read | January 31, 2020 in Money
Can you buy a money order with a credit card? And if you can, would it be a smart thing to do? The short answers are “sometimes” and “probably not—it’s a high-cost choice.” But let’s break this down.
Even in the digital payments era of mobile apps that transfer money instantly, money orders are still issued by most banks, some retailers, and the Postal Service—and are still broadly accepted as cash. You can use them in lieu of cash or a personal check to buy something or to transfer money to another person.
Money orders have certain advantages over cash and checks, which has helped them remain on the scene. For one thing, they’re traceable. When you buy a money order you get a receipt with the date of purchase, the dollar amount, and a banking code that can be used to track it. This makes money orders more secure than most other forms of payment and—unlike cash—if a money order is lost or stolen you might be able to get it replaced.1
Money orders differ from cash, checks, or both in four other important ways:
Money orders have certain disadvantages as well:
Credit card providers generally allow you to pay for a money order with a credit card, but they typically treat the transaction as a cash advance rather than a regular purchase. So, given the extra fees and interest charges you’ll accrue, personal finance experts agree that it’s almost never a good idea to use your credit card to buy a money order. Here are the reasons why: