Do you need to buy a money order and are considering using a credit card? Perhaps it’s currently your only payment method, but are you unsure whether a credit card can be used to buy a money order or what the repercussions could be?
Well, you aren’t alone! It’s a common question and one we are asked frequently. We all want to avoid hidden charges and high interest rates on our credit cards and ensure that purchasing a money order won’t harm our credit.
But with so little information out there and the rules varying from one credit card to another, it can be difficult to get the answers you need and leaves you feeling overwhelmed and frustrated.
Well, no more! Today, we will tell you if you can buy a money order with a credit card and all the information you need to be aware of before doing so.
We have all the information you need to make an informed decision, so sit back, relax, and get ready to learn everything you need to know about buying a money order with a credit card!
Can You Buy A Money Order With A Credit Card?
While you can purchase a money order with a credit card, there aren’t many places that allow you to do this. Most money orders will need to be purchased with cash or a debit card, as the issuers want the money before issuing the money order.
You can check when you purchase a money order, but generally, only 7-Eleven stores and Western Union allow you to buy a money order with a credit card.
If you wish to purchase your money order from either of these, then great, head on down with your credit card and make the purchase today!
However, we would strongly recommend some caution when using a credit card to purchase a money order. You can incur additional charges that, if not paid off, can impact your credit score.
Check with your credit card provider if they charge for money orders before making the purchase.
As so few companies allow you to purchase a money order with a credit card, it’s best instead to use cash or a debit card to purchase the money order stress-free and avoid charges.
Will My Credit Card Charge Me For Money Orders?
We touched on this briefly earlier, but yes, you can be charged for purchasing a money order depending on your credit card provider. This is because some issuers consider the money transfer as a cash advance.
A cash advance incurs more interest than regular purchases, sometimes with the rate being substantially higher than regular purchases.
These interest charges will be added to your balance, meaning you will pay more for the money order.
If you can pay them off, that’s fine, but if you struggle to clear the balance with the added interest in one go, you are going to encounter further interest charges that leave your next bill or future bills higher too.
You can expect your credit card provider to charge you an interest rate for a cash advance or purchasing a money order even if you are in a no-interest grace period.
When you first receive them, most credit cards come with an interest-free period for the first few months. You won’t pay interest on any remaining balances during this period, allowing you time to make larger, one-off purchases and pay them in installments without incurring interest.
But there are some exceptions, and a cash advance is one. If your credit card provider classes a money order as a cash advance, interest can accrue immediately, even in the grace period.
There might even be a fee on top of the interest, say $20 or more, for the cash advance.
These added costs should be considered, and in most cases, it costs too much to use a credit card to purchase a money order. However, if it’s your only option, try and pay these fees off immediately to prevent interest from building up.
It’s worth checking with your credit card provider and reading your cardholder agreement before purchasing the money order.
You can check to see what charges and interest rates your provider has for money orders and cash advances so that you aren’t hit with any nasty surprises when your bill arrives.
Does Using A Credit Card To Buy A Money Order Hurt My Credit Score?
Provided that you pay your bill on time and make at least the minimum monthly payment, using a credit card to buy a money order shouldn’t damage your credit score.
However, you will need to consider the added fees and higher interest rates and ensure that you can afford them before doing so. If you have the funds to purchase the money order and pay the bill on time, your credit is unlikely to be affected.
However, there are times where purchasing a money order can negatively affect your credit score.
If purchasing the money order raises your credit utilization ratio above 30%, your credit score can be impacted. It will be lowered as you attempt to clear through a higher balance, and you are likely to encounter larger interest charges on your statement until you can pay the entire balance.
Also, suppose there is already a balance to be paid on your credit card. In that case, your credit card provider might put your future payments towards paying that, rather than the more expensive cash advance balance you accrued when buying the money order.
It can be harder to pay your full balance then and will likely be hit with higher interest payments if the balance doesn’t come down quickly.
If you find yourself in this situation and your credit score isn’t too bad, you might qualify for a balance transfer. You can put your remaining balance onto a new credit card with a 0% interest rate or lower rates than you are currently paying.
It will help get your balance down and avoid high-interest charges being added to the balance. Comparison sites are a good place to find these but check you will be eligible before applying.
You can also speak to a financial advisor or someone at your credit card provider if you struggle with the payments. There are people available to help, and you don’t need to suffer or struggle in silence.
And just like that, we have come to the end of our money order journey today. As you can see, you can purchase a money order on a credit card, but you need to think carefully before you do. Consider any charges or higher interest rates you might encounter and how that will impact you before deciding.
Often it’s easier and cheaper to purchase the money order with cash or a debit card to avoid these charges. Plus, these methods are more widely accepted! Consider all these factors before going ahead and purchasing your money order.