By Elliot M. Kass | American Express Credit Intel Freelance Contributor
4 Min Read | January 31, 2020 in Money
Money orders are a way to make smaller purchases or send someone cash.
They need to be paid for up front, and many issuers will not accept credit cards as a form of payment.
Those that do accept cards treat a money order purchase as a cash advance—so you will likely incur higher fees and begin paying interest immediately.
Therefore, experts generally agree it’s not a good idea to buy a money order with a credit card.
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:
Money orders are widely available and can be useful alternatives to cash and personal checks. But many issuers don’t let you buy a money order with a credit card. While some do, the cost will likely be higher. So, if you need a money order but have another way to pay for it, you may be better off keeping your credit card in your wallet.
3 “How Money Orders Work: What You Should Know,” NerdWallet
4 “Can You Buy a Money Order with a Credit Card?,” Credit Card Insider
5 “Can You Buy a Money Order with a Credit Card?” U.S. News & World Report
6 “Domestic Money Orders,” USPS.com