There may be a time when a credit card payment, cash or check won’t do. On some occasions, you’ll need a money order instead. But why would anyone want or need one? Here’s what you need to know about how to get a money order, when it’s best to use one and how to avoid potential scams.
A money order is a prepaid paper document used for purchases, similar to a check. Both a money order and a personal check are issued for a certain amount, include the name of the recipient and need to be signed. But there are a few differences between them.
For starters, money orders are typically limited to $1,000, while checks can be written for any amount. When you write a check, you’re paying for something with the funds from your checking account. However, you may not have enough money in the account, and the check can bounce. Or you could stop payment on the check. The receiver runs the risk that the check you sent isn’t worth the paper it’s written on.
This doesn’t happen with a money order. To get a money order, you visit a location that issues them and turn over the cash amount you want, plus a small fee. In a sense, it’s like a guaranteed check because you paid the funds upfront — the receiver can rest assured it won’t “bounce” when it’s time to cash it.
Getting one takes more work than writing out a check or swiping your credit card. Luckily, they’re readily available. Here are a few places:
- Grocery stores
- Convenience stores
- Post offices
- Gas stations
- Check-cashing stores
- Banks or your credit union
- MoneyGram and Western Union locations
- Retail stores
Prices vary depending on where you go. For example, a financial institution may charge more for a money order than a convenience store or USPS, and a Western Union money order may differ in price from that of a MoneyGram money order. Getting one at Walmart may be your cheapest bet — you can buy one for 88 cents.
Most people only bother with money orders if a business or person asks for one. But there are times when you might want to use one instead of paying with cash, personal check, cashier’s check or a credit card. Consider using a money order when:
If you’re mailing a payment, you may feel more comfortable sending a money order than a paper check. Checks can get lost in the mail, and someone can access your banking information right off the check.
Another scenario where a money order makes sense is when you’re paying for an online purchase or another type of transaction where you don’t know the seller well. It may be better to send a money order to protect your personal information like your home address and bank account number.
If you only have a savings account or an online bank account with bill pay, you may not have checks handy. Some people don’t even have an account at all. A money order can substitute for a check, but you should confirm ahead of time that the receiver accepts this type of payment.
If your budget is tight and you worry about bouncing a check, a money order may be a good payment method. Since the funds are prepaid, you won’t have to worry about insufficient funds — or the hefty fees they come with.
If you’re planning to send money abroad, then domestic money orders, unfortunately, won’t work. In this case, you’ll need to purchase an international money order. You can buy one at any USPS location to send payments overseas. It’s also worth mentioning that an international money order from the U.S. Postal Service is accepted in 10 Latin American countries.
The process isn’t complicated. Here’s how to get a money order.
- Find locations that sell money orders. You can buy one in gas stations, grocery stores, Western Union, MoneyGram locations, CVS drugstores, 7-Eleven, Kroger and Walmart, to name a few.
- Bring your payment. Have the cash ready for the amount you’d like the order written for, plus the fee, which can vary from 88 cents to more than $5. Some locations may even accept payment with a debit card or credit card. Avoid paying with a credit card if you can — it usually costs more.
- Fill out the money order right away. Once you pay, you’ll receive a blank money order. Fill it out with the name of the recipient before you leave — anyone can cash it otherwise. Add your name, your address and the name of the person receiving it, and sign it.
- Save the receipt to track it. You’ll receive a copy of the order itself or a receipt with the details. You can use it to track your order and make sure your payee received and cashed it. If there’s a problem, you’ll need the receipt to get help.
You can cash a money order at the same location it was issued from. You’ll want to shop around to check on cashing fees. You’ll need to show a photo ID and sign the money order. You can also deposit it into your bank account. But make sure you read on to confirm it’s real before you deposit it.
A money order may be safer than a check if you follow the instructions carefully. Always fill out the name of the receiver and sign it, or anyone could cash it. No personal or banking data is printed on the document, protecting your privacy. You’ll need to sign it — and so will the recipient when they cash it after presenting their photo ID, which could cut down on theft.
The receipt is an extra layer of protection. You can track the money order to confirm it was received and cashed by the right person. And if it’s lost or damaged, you can use the receipt to request a replacement or a refund.
Although money orders are pretty safe, fraud happens, and they can be forged. If you receive one, inspect it carefully. Check the quality of the paper. Look for seals or stamps. Scan for misspelled words. If you’re unsure, contact the issuer and ask them to verify if they issued it before you cash or deposit it.
Avoid situations where strangers ask you to cash or deposit a money order on their behalf. Some scams involve sending you one to cash because you’ve won the lottery or as payment for a work-from-home job. You’ll be asked to deposit the money order, pay them part of the funds while you keep the rest “for your troubles.” It will turn out to be fake — and you’ll be out the money you wired plus the bounced check fees.
Now that you know how to get a money order and why you may want one, you have an alternative form of payment for when it’s time to pay the bills. Although you may not get any perks or chances to earn cash back or rewards points like you would using a credit card, this type of payment has its benefits.
Compared to a check, you’ll protect your personal information, such as your bank account number and home address. Plus, the order is prepaid, so you don’t have to worry about credit card finance charges or late fees because you forgot to make a payment. And you’ll save on overdraft fees from bounced checks.