Can You Pay for a Money Order With a Credit Card?

Paying for a money order with a credit card can seem like a convenient option, but it’s generally not a straightforward process. At money-central.com, we’re here to guide you through the nuances of financial transactions, ensuring you make informed decisions that align with your financial well-being. While using a credit card directly for a money order is often restricted, alternative solutions are available to manage your payments effectively. Let’s explore the ins and outs of this topic and discover the best paths forward for your financial needs.
This article is for informational purposes only, and it does not constitute financial advice.

1. Understanding Money Orders and Their Purpose

Money orders are a secure and reliable way to send money, particularly when dealing with individuals or businesses that may not accept personal checks or credit cards. They function similarly to checks but are prepaid, ensuring the recipient that the funds are available. Understanding their purpose is crucial before considering how to pay for them.

What is a Money Order? A money order is a paper document that guarantees payment to a specific recipient. It’s purchased for a set amount, and the funds are secured when the money order is issued.
Why Use a Money Order? Money orders are useful for various reasons:
- Security: They are more secure than cash because they can be replaced if lost or stolen.
- No Bank Account Required: You don’t need a bank account to purchase or receive a money order.
- Acceptance: Many businesses and individuals accept money orders for payments.
- Tracking: Money orders can be tracked, providing peace of mind.
Common Uses: People use money orders for:
- Paying Bills: Especially when a check or electronic payment is not accepted.
- Sending Money: To family or friends, particularly when they don’t have a bank account.
- Rent Payments: Some landlords prefer money orders for rent.
- Online Purchases: When a seller doesn’t accept credit cards or personal checks.

2. The Challenge of Using Credit Cards for Money Orders

While the idea of using a credit card to purchase a money order might seem appealing, it’s not typically a direct option. Most places that sell money orders, such as post offices, banks, and retail stores, do not accept credit cards for this type of transaction.

Why the Restriction?
- Cash-Like Transaction: Purchasing a money order with a credit card is often viewed as a cash advance. Credit card companies charge high fees and interest rates on cash advances.
- Risk of Default: The risk of non-payment is higher for cash-like transactions. If a consumer can’t pay their credit card bill, the credit card company is left holding the bag.
- Money Laundering Concerns: Allowing credit card purchases of money orders could facilitate money laundering.
Fees and Interest Rates:
- Cash Advance Fees: Typically range from 3% to 5% of the transaction amount.
- Higher Interest Rates: Cash advances often have higher interest rates than regular purchases. According to a study by the New York University’s Stern School of Business in July 2023, the average APR for cash advances is around 25%.
- No Grace Period: Interest accrues immediately on cash advances, unlike purchases that may have a grace period.
Impact on Credit Score:
- High Credit Utilization: Using a credit card for a money order increases your credit utilization ratio, which can negatively impact your credit score.
- Cash Advance Reporting: Cash advances are reported separately on your credit report and can signal risky financial behavior.

3. Indirect Methods: Workarounds and Alternatives

Despite the direct restrictions, there are a few indirect methods and alternatives you might consider if you need to use a credit card for a money order.

Using a Cash Advance:
- How it Works: You can take a cash advance from your credit card and use the cash to purchase a money order.
- Pros: It allows you to use your credit card for the money order.
- Cons: High fees and interest rates make this an expensive option. It can also negatively impact your credit score.
- Example: If you take out a $500 cash advance with a 5% fee, you’ll pay $25 upfront. With an APR of 25%, the interest can add up quickly.
Using a Credit Card to Buy a Prepaid Debit Card:
- How it Works: Purchase a prepaid debit card with your credit card and then use the debit card to buy a money order.
- Pros: Avoids direct cash advance fees.
- Cons: Purchase fees for the prepaid card and potential fees for using the debit card to buy a money order.
- Example: A prepaid debit card might have a purchase fee of $5.95. The money order could have an additional fee of $1 to $5.
Using a Payment App with a Credit Card:
- How it Works: Some payment apps, like PayPal or Venmo, allow you to send money to others, who can then use those funds to purchase a money order.
- Pros: Convenient and avoids direct cash advance fees.
- Cons: Fees for sending money via credit card can be high. The recipient must be willing to use the funds to purchase a money order.
- Example: PayPal charges a fee of 2.9% plus a fixed fee based on the currency when sending money via credit card.

Alternative text: A person uses a mobile payment app on their smartphone to send money, illustrating a modern method of financial transaction.

Bill Payment Services:
- How it Works: Some bill payment services allow you to pay bills using a credit card, and they will then send a money order to the biller.
- Pros: Convenient and can help you earn credit card rewards.
- Cons: Fees can be high, and not all billers are supported.

4. Where to Purchase Money Orders

Knowing where to buy money orders is essential, regardless of how you plan to pay for them. Different locations offer varying fees and convenience levels.

United States Postal Service (USPS):
- Pros: Widely available, reliable, and relatively low fees.
- Cons: Does not accept credit cards for money order purchases.
- Fees: As of 2024, USPS money order fees range from $1.45 for amounts up to $500 to $1.95 for amounts between $500.01 and $1,000.
Walmart:
- Pros: Convenient, as many people shop at Walmart regularly. Lower fees than some other options.
- Cons: Does not accept credit cards for money order purchases.
- Fees: Walmart money order fees are typically around $0.70 to $1 per money order, up to $1,000.
Western Union:
- Pros: Widely available and offers international money orders.
- Cons: Higher fees than USPS or Walmart.
- Fees: Western Union money order fees vary but are generally higher, ranging from $1 to $10, depending on the amount and location.
MoneyGram:
- Pros: Similar to Western Union, with broad availability.
- Cons: Higher fees than USPS or Walmart.
- Fees: MoneyGram money order fees are competitive with Western Union, typically ranging from $1 to $10.
Banks and Credit Unions:
- Pros: Reliable and may offer lower fees for account holders.
- Cons: Requires a bank account.
- Fees: Fees vary by institution but are often lower for customers. Some banks may offer free money orders to certain account holders.

Table: Comparison of Money Order Purchase Locations

Location	Accepts Credit Cards	Fees (Approximate)	Pros	Cons
USPS	No	$1.45 – $1.95	Widely available, reliable, low fees	Does not accept credit cards
Walmart	No	$0.70 – $1.00	Convenient, lower fees	Does not accept credit cards
Western Union	Varies	$1.00 – $10.00	Widely available, international money orders	Higher fees
MoneyGram	Varies	$1.00 – $10.00	Broad availability	Higher fees
Banks and Credit Unions	Varies	Varies	Reliable, lower fees for account holders	Requires a bank account

5. Understanding Credit Card Cash Advances

Since using a cash advance is one of the indirect methods to pay for a money order with a credit card, it’s crucial to understand the specifics of cash advances.

What is a Credit Card Cash Advance? A cash advance is a service provided by credit card issuers that allows cardholders to withdraw cash from their credit line. It’s different from using your credit card to make purchases.
How Cash Advances Work:
- Withdrawal: You can withdraw cash from an ATM using your credit card or get a cash advance at a bank.
- Credit Limit: The cash advance limit is usually lower than your overall credit limit.
- Fees and Interest: Cash advances come with fees and higher interest rates.
Key Differences Between Cash Advances and Regular Purchases:

Feature	Cash Advance	Regular Purchase
Fees	Higher, typically 3-5%	None
Interest Rates	Higher, often around 25%	Lower, varies by credit card
Grace Period	No grace period, interest accrues immediately	Grace period, interest accrues if balance is not paid in full
Credit Score Impact	High credit utilization can lower score	High credit utilization can lower score

When to Consider a Cash Advance (and When Not To):
- Consider: Only in emergencies when you have no other options.
- Avoid: For routine expenses or when you can use other payment methods.

6. Alternatives to Money Orders

Before deciding to use a credit card (even indirectly) for a money order, consider whether there are better alternatives available.

Checks (Personal or Cashier’s):
- Pros: Widely accepted, often free (personal checks) or low-cost (cashier’s checks).
- Cons: Requires a bank account. Personal checks may not be accepted by all parties.
- Cashier’s Checks: Guaranteed by the bank, making them more secure.
Electronic Transfers (ACH):
- Pros: Convenient, fast, and often free.
- Cons: Requires both parties to have bank accounts and share their account information.
- How it Works: Funds are transferred electronically between bank accounts.
Payment Apps (PayPal, Venmo, Zelle):
- Pros: Convenient, fast, and widely used.
- Cons: May have fees, especially when using a credit card. Requires both parties to have accounts with the app.
- Zelle: Directly linked to bank accounts, often fee-free.
- PayPal and Venmo: Offer additional features like purchase protection.
Prepaid Debit Cards:
- Pros: Can be used online and in stores, offering a level of anonymity.
- Cons: Purchase fees and usage fees can add up.

Table: Comparison of Payment Alternatives

Payment Method	Fees	Pros	Cons
Personal Checks	Free (usually)	Widely accepted, convenient	Requires a bank account, may not be accepted by all parties
Cashier’s Checks	Low-cost	Guaranteed by the bank, secure	Requires a bank account
Electronic Transfers	Often free	Convenient, fast	Requires both parties to have bank accounts and share their account information
Payment Apps	Varies	Convenient, fast, widely used	May have fees, requires both parties to have accounts
Prepaid Debit Cards	Purchase and usage fees	Can be used online and in stores, offers anonymity	Fees can add up

7. Strategies for Managing Finances Without Relying on Credit Cards

Relying on credit cards for essential payments like money orders can indicate underlying financial challenges. Here are strategies to manage your finances more effectively.

Budgeting and Expense Tracking:
- Create a Budget: Use budgeting apps, spreadsheets, or the envelope method to track income and expenses.
- Track Your Spending: Identify where your money is going and look for areas to cut back.
- Tools: Mint, YNAB (You Need A Budget), Personal Capital.
Building an Emergency Fund:
- Start Small: Aim to save at least $1,000 in a readily accessible savings account.
- Automate Savings: Set up automatic transfers from your checking account to your savings account each month.
- Gradual Increase: Gradually increase your emergency fund to cover 3-6 months of living expenses.
Reducing Debt:
- Prioritize High-Interest Debt: Focus on paying off credit card debt and other high-interest loans first.
- Debt Snowball vs. Debt Avalanche: Choose a debt repayment strategy that works for you. The debt snowball method focuses on paying off the smallest balances first for quick wins, while the debt avalanche method targets the highest interest rates first to save money in the long run.
- Debt Consolidation: Consider consolidating high-interest debt into a lower-interest loan or balance transfer credit card.
Improving Credit Score:
- Pay Bills on Time: Payment history is the most significant factor in your credit score.
- Keep Credit Utilization Low: Aim to use less than 30% of your available credit.
- Check Your Credit Report Regularly: Look for errors and dispute them. You can get a free copy of your credit report from AnnualCreditReport.com.
Seeking Financial Advice:
- Financial Advisors: Consult with a certified financial planner (CFP) for personalized advice.
- Credit Counseling Agencies: Non-profit agencies can help you create a debt management plan.
- Online Resources: Websites like money-central.com offer educational articles and tools to help you manage your finances. Address: 44 West Fourth Street, New York, NY 10012, United States. Phone: +1 (212) 998-0000. Website: money-central.com.

Alternative text: A person is reviewing financial documents and using a calculator, illustrating diligent financial management practices.

8. Navigating Fees and Costs

When dealing with money orders and credit cards, it’s crucial to be aware of all potential fees and costs to avoid surprises.

Money Order Fees:
- Issuance Fees: Charged by the place where you buy the money order (USPS, Walmart, Western Union, etc.).
- Replacement Fees: If a money order is lost or stolen, there’s a fee to replace it.
- Cashing Fees: Some places may charge a fee to cash a money order, especially if you don’t have an account with them.
Credit Card Fees:
- Cash Advance Fees: Typically 3-5% of the cash advance amount.
- Annual Fees: Some credit cards charge an annual fee.
- Late Payment Fees: If you don’t pay your credit card bill on time, you’ll be charged a late fee.
- Over-the-Limit Fees: If you exceed your credit limit, you may be charged an over-the-limit fee.
Prepaid Debit Card Fees:
- Purchase Fees: Fee to buy the card.
- Activation Fees: Fee to activate the card.
- Monthly Fees: Some cards charge a monthly fee.
- Transaction Fees: Fees for using the card at ATMs or for purchases.
- Inactivity Fees: Fees if you don’t use the card for a certain period.
Payment App Fees:
- Transaction Fees: Fees for sending money, especially when using a credit card.
- Instant Transfer Fees: Fees for instant transfers to your bank account.
Strategies to Minimize Fees:
- Shop Around: Compare fees at different money order locations.
- Use Alternatives: Consider alternatives like checks or electronic transfers to avoid fees.
- Read the Fine Print: Understand all the fees associated with credit cards and prepaid debit cards.
- Budget and Plan: Avoid relying on cash advances by planning your finances carefully.

9. Security and Fraud Prevention

When dealing with money orders and credit cards, security should be a top priority.

Protecting Money Orders:
- Keep the Receipt: Store the receipt in a safe place. It’s needed to track or replace the money order if it’s lost or stolen.
- Fill Out Completely: Fill out the money order completely and legibly, including the recipient’s name and your name and address.
- Avoid Sending to Strangers: Only send money orders to people you know and trust.
- Track the Money Order: Use the tracking number to monitor the status of the money order.
Credit Card Security:
- Protect Your Card Information: Don’t share your credit card number or PIN with anyone.
- Monitor Your Account Regularly: Check your credit card statements for unauthorized transactions.
- Use Strong Passwords: Use strong, unique passwords for your online credit card accounts.
- Be Wary of Phishing Scams: Don’t click on suspicious links or respond to emails asking for your credit card information.
- Report Lost or Stolen Cards Immediately: Contact your credit card issuer to report a lost or stolen card.
Prepaid Debit Card Security:
- Register Your Card: Register your prepaid debit card online to protect it from loss or theft.
- Monitor Your Balance: Check your balance regularly to ensure there are no unauthorized transactions.
- Use Secure Websites: Only use your prepaid debit card on secure websites with “https” in the URL.
Payment App Security:
- Use Strong Passwords: Use strong, unique passwords for your payment app accounts.
- Enable Two-Factor Authentication: Add an extra layer of security to your accounts.
- Be Careful Who You Send Money To: Only send money to people you know and trust.
- Monitor Your Account Regularly: Check your account activity for unauthorized transactions.

Alternative text: Lock and shield symbols representing security and protection, crucial elements when dealing with financial transactions.

10. Case Studies and Examples

To illustrate the concepts discussed, here are a few case studies and examples.

Case Study 1: Sarah’s Rent Payment:
- Situation: Sarah needs to pay her rent but doesn’t have a checking account. Her landlord only accepts money orders.
- Challenge: Sarah wants to use her credit card to earn rewards.
- Solution: Sarah considers using a cash advance but realizes the fees and interest rates are too high. Instead, she opts to purchase a prepaid debit card with her credit card and uses the debit card to buy a money order at Walmart.
- Outcome: Sarah pays her rent on time and avoids high cash advance fees, but she pays a small purchase fee for the prepaid debit card.
Case Study 2: John’s Online Purchase:
- Situation: John wants to buy an item from an online seller who only accepts money orders.
- Challenge: John doesn’t want to mail a personal check.
- Solution: John uses PayPal to send money to a friend, who then uses the funds to purchase a money order at the post office and mails it to the seller.
- Outcome: John completes his online purchase, but he pays a small fee for sending money via PayPal.
Example 1: Calculating Cash Advance Costs:
- Scenario: You need a $300 money order and decide to use a cash advance from your credit card.
- Cash Advance Fee: 5% of $300 = $15
- Interest Rate: 25% APR (compounded daily)
- If you pay off the cash advance in 30 days: Interest = approximately $6.16
- Total Cost: $300 + $15 + $6.16 = $321.16
Example 2: Comparing Money Order Fees:
- Location 1: USPS: $1.45 fee for a $300 money order
- Location 2: Western Union: $5 fee for a $300 money order
- Savings by using USPS: $5 – $1.45 = $3.55

11. Expert Opinions and Research

To provide a well-rounded perspective, let’s consider expert opinions and research on using credit cards for money orders.

Financial Experts:
- Clark Howard: “Avoid using credit cards for cash advances. The fees and interest rates are too high.”
- Dave Ramsey: “Cash advances are a sign of financial trouble. Focus on budgeting and building an emergency fund.”
- Suze Orman: “Never use a credit card for something you can’t afford to pay back immediately.”
Research Studies:
- New York University’s Stern School of Business (July 2023): The average APR for cash advances is around 25%.
- Experian: High credit utilization can negatively impact your credit score.
- Federal Trade Commission (FTC): Monitor your credit report regularly for errors and signs of fraud.
Expert Insights:
- Financial advisors emphasize the importance of avoiding high-fee transactions like cash advances.
- Credit counseling agencies recommend creating a budget and debt repayment plan to avoid relying on credit cards for essential payments.
- Academic research highlights the long-term financial impact of high-interest debt.

12. Frequently Asked Questions (FAQ)

Here are some frequently asked questions about paying for money orders with credit cards.

Can I directly pay for a money order with a credit card at the post office?
No, the United States Postal Service (USPS) does not accept credit cards for money order purchases. They typically accept cash, debit cards, or traveler’s checks.
Is it possible to use a credit card to buy a money order at Walmart?
No, Walmart generally does not allow customers to purchase money orders with a credit card. They usually accept cash and debit cards.
What is a cash advance, and how does it relate to money orders?
A cash advance is when you use your credit card to withdraw cash. While you can use this cash to buy a money order, it comes with high fees and interest rates.
Are there any payment apps that allow me to send money using a credit card, which can then be used for a money order?
Yes, apps like PayPal and Venmo allow you to send money using a credit card. However, they charge fees for credit card transactions, so be sure to consider these costs.
What are the alternatives to using a credit card for a money order?
Alternatives include using a debit card, personal check, electronic transfer, or payment apps with a bank account.
How do cash advance fees impact the overall cost of getting a money order?
Cash advance fees typically range from 3% to 5% of the transaction amount and come with higher interest rates, making it a very expensive option compared to other payment methods.
Can using a credit card cash advance to get a money order affect my credit score?
Yes, using a cash advance increases your credit utilization ratio, which can negatively impact your credit score, especially if you’re using a large portion of your available credit.
What security measures should I take when dealing with money orders?
Always keep your receipt, fill out the money order completely, avoid sending to strangers, and track the money order’s status to prevent fraud.
Are there any prepaid debit cards that I can load with a credit card and then use to buy a money order?
Yes, you can purchase a prepaid debit card with a credit card and then use the debit card to buy a money order. However, be aware of purchase fees and usage fees associated with prepaid cards.
Where can I find the lowest fees for purchasing money orders?
Generally, USPS and Walmart offer some of the lowest fees for purchasing money orders. Banks and credit unions may also offer lower fees for their account holders.

13. Conclusion: Making Informed Financial Decisions

While it’s technically possible to use a credit card to pay for a money order through indirect methods like cash advances or prepaid debit cards, it’s generally not recommended due to the high fees and potential impact on your credit score. Understanding the alternatives and adopting sound financial management strategies can help you avoid relying on credit cards for essential payments.

At money-central.com, our goal is to provide you with the knowledge and tools you need to make informed financial decisions. We encourage you to explore our website for more articles, tools, and resources to help you manage your finances effectively. Whether you’re looking to create a budget, build an emergency fund, reduce debt, or improve your credit score, we’re here to support you every step of the way. Take control of your financial future today with money-central.com. Remember, financial literacy and careful planning are your best defenses against unnecessary fees and financial stress. Visit money-central.com to learn more and take control of your finances today!

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