Alternatives to Using a Credit Card for Money Order Purchases

In the land of online payments and credit card opportunities, buying a money order using a credit card can seem like an enticing option. Unfortunately, the reality isn't as straightforward as one might hope. This article delves into the limitations of using a credit card for money order purchases and alternative payment methods that can be used instead.

Can You Use a Credit Card to Buy a Money Order?

The answer, in a nutshell, is yes, but there are a few reasons why it might not be the most practical option. Many merchants, including those that typically accept credit cards, have specific policies against using them for money order purchases.

For example, most merchants, like USPS, prefer cash or a debit card with a PIN. They see a transaction like this as posing a risk to the value and security of the money order. Additionally, dealing with credit cards often requires a merchant to pay transaction fees, making this a cost-unfriendly proposition for them.

Examples of Where You Can Use a Credit Card for Money Orders

There are a couple of notable exceptions to the rule. Entities such as Western Union and 7-Eleven allow credit card payments for money orders. However, these transactions come with fees and interest rates that make using a credit card less desirable.

For instance, if you try to purchase a $1000 money order using a credit card, you might have to pay a fee ranging from 3% to 5% of the purchase amount, plus interest. This could add up to at least a $30 fee, which many would see as not worth the trouble.

Other providers like Walmart, MoneyGram, and Post Office services do not accept credit card payments for money orders. These services require that you use cash or a debit card with a PIN.

The Thirteenth Amendment to the U.S. Constitution

There’s a legal layer to this issue, too. In the United States, it’s illegal to use a credit card to purchase a money order due to the Straw Purchase Statute. This law is aimed at preventing money laundering and fraud by making it illegal to use a credit card to acquire a money order without having legal use for the funds. If you attempt to use a credit card, you could be flagged for money laundering if the payments officer or fraud investigators determine that you don’t have a legitimate purpose for the money.

Alternatives to Using a Credit Card

Given the above, what are some better options for purchasing a money order? Here are a few options:

Cash: This is the simplest and most straightforward method. However, it may not always be the most convenient. Debit Card: By far the most common alternative, using a debit card is perfectly acceptable and eliminates the risk of high fees or legal issues. Personal Checks: Some places may accept personal checks instead of cash or cards. However, this may be less common. Australia and UK: In some countries like the UK, using a credit card might be possible, but you should check with your card issuer for details and potential additional costs.

Conclusion

While you can use a credit card to buy a money order, it’s not a recommended practice due to potential transaction fees, interest, and legal risks. Opting for cash, a debit card, or checks are generally safer and more cost-effective options. Always check with the service provider before attempting a purchase to ensure that you are following their specific rules and regulations.