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- You can’t directly use a credit card to purchase a money order at most locations.
- Cash advances from credit cards can be used to obtain money orders indirectly.
- Cash advances often involve fees ranging from 3% to 5% of the withdrawn amount.
- Interest on cash advances starts accumulating immediately, with no grace period.
- High credit utilization from cash advances can negatively affect your credit score.
- Debit cards, cash, or bank transfers are viable alternatives to using credit cards for money orders.
- Using cash to buy a money order avoids fees and interest charges from credit cards.
- Consider the full cost of cash advances before choosing this option to obtain a money order.
How to Purchase Money Order with Credit Card
A money order is a secure way to send or receive money, often used for payments when other methods like checks or cash are not ideal. They are widely accepted by various service providers, including utility companies, landlords, and businesses.
However, if you are thinking about how to purchase a money order with credit card, it’s important to know that it’s generally not possible to directly use a credit card for this transaction. But don’t worry—there is a workaround. Let’s dive into why this is the case, and how you can still make this happen by taking a few extra steps.
Why You Can’t Directly Use a Credit Card to Buy a Money Order
While it may seem like a straightforward request, most money order providers, including the U.S. Postal Service (USPS), Walmart, Western Union, and 7-Eleven, typically do not accept credit cards as a form of payment. They usually require cash or debit cards for purchasing a money order.
This limitation is in place for a few reasons. Firstly, credit card payments for money orders could be seen as a form of cash-like transaction. Credit card companies usually try to avoid facilitating such transactions, as they may increase the risk of fraud or misuse.
Secondly, credit card companies often do not want to facilitate payments for transactions that could be used for illegal activities, which may sometimes involve money orders.
However, just because it’s not directly possible doesn’t mean you’re completely out of options. Let’s take a look at the workaround that allows you to purchase a money order with your credit card.
The Workaround: Using a Cash Advance
Even though you can’t directly purchase a money order with a credit card, you can still obtain one by first converting your credit into cash. The process involves taking a cash advance from your credit card and using that cash to buy the money order. Here’s how to purchase a money order with credit card through a cash advance:
1. Get a Cash Advance
A cash advance is when you withdraw funds from your credit card, either through an ATM, a bank branch, or by using convenience checks issued by your credit card company.
- ATM: If your credit card offers a cash advance feature, you can visit an ATM and withdraw cash from your credit card. Be aware that not all ATMs will allow this; you will need to find one that accepts credit card cash advances.
- Bank Branch: You can also go to a bank that works with your credit card issuer and request a cash advance in person.
- Convenience Checks: Some credit card companies provide convenience checks that you can write to yourself, which you can then cash or deposit into your bank account. This gives you access to the funds you need.
2. Use the Cash to Buy a Money Order
Once you have the cash, you can use it to buy a money order at locations such as the U.S. Postal Service, Walmart, Western Union, or 7-Eleven. These locations accept cash or debit cards but don’t typically accept credit cards. With the cash on hand, you can now purchase the money order.
While the process may seem a bit more involved, it allows you to use the funds from your credit card to obtain a money order.
Drawbacks of Using a Cash Advance
While the method above allows you to purchase a money order with credit card indirectly, there are some significant drawbacks you should be aware of before going this route.
Fees and Interest
Cash advances are costly. Credit card companies usually charge a fee for this service, which can range from 3% to 5% of the amount withdrawn. For example, if you take out $1,000 as a cash advance, you could pay a fee of $30 to $50.
Additionally, interest rates on cash advances are often much higher than regular credit card purchases. The average interest rate for a cash advance is significantly higher, sometimes up to 25% or more.
This interest will begin accumulating from the moment you withdraw the funds, unlike regular credit card purchases that may have a grace period before interest starts to accrue.
No Grace Period
When you make a regular purchase with your credit card, you typically have a grace period of 21 days to pay off your balance before interest starts accumulating. With a cash advance, however, there is no grace period. Interest starts accruing immediately, which can make this option more expensive in the long run.
Impact on Credit Utilization
Credit utilization is the ratio of your current credit card balance to your credit limit. A higher credit utilization ratio can negatively impact your credit score. When you take out a cash advance, it increases your balance, which raises your credit utilization ratio. This can hurt your credit score, especially if you don’t pay off the balance quickly.
If you use a cash advance to purchase a money order, be mindful of how much it affects your credit utilization and how it could impact your credit score. It’s crucial to pay back the cash advance as soon as possible to avoid long-term damage to your credit.
Alternatives to Using a Credit Card for Money Orders
If you are concerned about the drawbacks of using a cash advance to purchase a money order, here are some alternative methods you can consider:
1. Use a Debit Card
Debit cards are widely accepted for purchasing money orders at most locations, including USPS, Walmart, and Western Union. If you have a checking account or a prepaid debit card, you can easily use it to pay for a money order without needing a credit card.
This eliminates the need for the high fees and interest rates associated with cash advances.
2. Use Cash
If you have cash on hand, you can simply use it to purchase a money order directly. Cash is always an acceptable form of payment, and you won’t have to worry about fees or interest rates.
3. Use a Bank Transfer or Check
Many businesses that sell money orders also accept bank transfers or personal checks as payment. This can be an excellent alternative if you don’t want to use a credit card or cash. While this may take a little longer to process, it is a straightforward and fee-free method for purchasing a money order.
Frequently Asked Questions
Here are some of the related questions people also ask:
Can I use a credit card to buy a money order directly?
No, most money order providers like the USPS, Walmart, and Western Union do not accept credit cards for direct payments. You need to use cash or a debit card.
How can I buy a money order with a credit card?
You can take a cash advance from your credit card and use that cash to purchase a money order at participating locations like USPS or Walmart.
What is a cash advance, and how does it work for money orders?
A cash advance allows you to withdraw funds from your credit card, which you can then use as cash to buy a money order. This process incurs fees and higher interest rates than regular credit card purchases.
Are there any fees associated with using a cash advance to buy a money order?
Yes, cash advances often come with a fee, typically ranging from 3% to 5% of the amount withdrawn, along with higher interest rates.
How does using a cash advance affect my credit score?
A cash advance increases your credit utilization ratio, which can negatively impact your credit score if not paid off quickly.
What are some alternatives to using a credit card to buy a money order?
You can use a debit card, cash, or a bank transfer to purchase a money order, which are generally easier and cheaper options.
Can I avoid paying high fees when buying a money order?
Yes, using cash, a debit card, or a bank transfer avoids the high fees and interest rates that come with cash advances from credit cards.
Is it safe to use a credit card for a cash advance?
While it’s generally safe, using a credit card for a cash advance is expensive due to high fees and immediate interest accrual, which can make it a costly option.
How long does it take to pay off a cash advance for a money order?
The time to pay off a cash advance depends on your payment terms, but be aware that interest starts accruing immediately, so it’s best to pay it off as soon as possible.
The Bottom Line
While you can’t directly purchase a money order with a credit card, you can still get one by first taking a cash advance from your credit card and using that cash to buy the money order.
However, there are some important factors to keep in mind, such as fees, interest rates, and the impact on your credit utilization. These factors can make the process expensive, so it’s important to weigh the pros and cons carefully before proceeding.
If you’d prefer to avoid the drawbacks of using a credit card, consider alternatives like using a debit card, cash, or a bank transfer. Each option offers a more straightforward, cost-effective way to obtain a money order without relying on credit cards.
Ultimately, how to purchase a money order with credit card depends on your situation and preferences. Be sure to explore all your options and choose the method that works best for you.