You may not use money orders often with online bill pay and peer-to-peer payment transfer apps. But they're still commonly used; in 2022, the United States Postal Service issued over 66.4 million money orders.

But how do you get one, and can you buy a money order with a credit card? Although some companies used to accept credit card payments for money orders, it's increasingly rare. And even if you find a money order distributor that accepts credit, it's an expensive way to buy one.

What is a money order?

A money order is an alternative payment method to cash or personal checks. Unlike personal checks, which can bounce if you don't have enough money in the account, money orders are more secure and never expire. There are some advantages to using a money order:

• Security: When you purchase a money order, you pay the full amount of the money order upfront, so the funds are guaranteed. It provides the seller with more security and peace of mind.

• Privacy: Because money orders are guaranteed, they also provide more privacy to you as the buyer. While personal checks include your name, address, and bank account and routing numbers, money orders don't include your personal information. You can pay for an item from a private seller without risking your personal details.

• Convenience: They can also come in handy if you don't have a bank account or have an account that's difficult to access. According to the Federal Deposit Insurance Corporation (FDIC), 9.7% of households used a money order in 2021, and they're particularly common among unbanked households.

Where to buy money orders

You can purchase money orders from a variety of places. One of the most common sources is the local post office; the post office issues nearly 220,000 new money orders daily.

But you can also purchase money orders from banks and distributors. Common money order distributors include grocery stores, convenience stores like 7-11 or Walmart, and money transfer services like Western Union or Amscot.

Maximum money order values

Unlike some payment methods, money orders have more restrictions. If you're buying a money order to send money within the United States, the maximum value is typically $1,000.

If you're sending money to someone in another country, the maximum amount varies by country, but the amount cannot exceed $700.

Money order fees

To get a money order, you typically have to pay a fee to the money order distributor. Fees vary by distributor and location. Below are the current fees for common money order distributors:

Can you buy a money order with a credit card?

To buy a money order, you need to bring your debit card or a lump sum of cash to cover the money order amount and the distributor's fee. Typically, credit cards aren't an acceptable payment method.

Previously, 7-11 and Western Union let you buy money orders with credit cards, but that's no longer the case. Both of those distributors now require cash or debit.

However, there is a workaround: You can use your credit card to take out a cash advance and use the advance amount to purchase a money order. However, this strategy should be a last resort and avoided if possible; it's an expensive way to get a money order.

The problem with using a credit card to get a money order

Although you can use a cash advance to purchase a money order, you should avoid that approach for the following reasons:

1. Cash advance fees can be substantial

Besides the fee to purchase the money order, you must also pay a cash advance fee on the amount you take out with your credit card. Cash advance fees can add up; the most common fee structure is 5% of the advance amount or $10, whichever is greater. If you took out a $1,000 cash advance for a money order, you'd pay $50 in cash advance fees.

2. Cash advances are subject to sky-high APRs

When you take out a cash advance, the advance amount is subject to a different APR than your regular purchases. The cash advance APR is usually much higher than the purchase APR; depending on the issuer, it can be as high as 36% APR.

3. There's no grace period on cash advances

With regular credit card purchases, you usually have a grace period between the billing cycle's end and when your payment is due. If you pay off the balance during the grace period, no interest will accrue.

But with cash advances, that's not the case. Cash advances have no grace period, so you'll pay the higher cash advance APR from the day of the transaction date.

4 alternatives to money orders

Money orders aren't the only way to send money securely and safely. Instead of a money order, consider these alternatives:

• Cashier's checks: If you need a check for more than $1,000, a cashier's check can be useful. Offered by banks that handle your checking or savings accounts, the bank guarantees the cashier's check amount. However, cashier's checks have higher fees than money orders.

• Online bill pay: Many companies, including rental properties or utility companies, allow you to pay online rather than using a money order. There may be a service fee for the online payment, but it may be less expensive and more convenient than purchasing a money order.

• Personal checks: Although they aren't as secure as money orders, personal checks are commonly accepted. If you have a checking account, you can use a personal check to pay rent, send money to a relative, or pay for services.

• Payment apps: Payment apps like Venmo and Zelle allow you to quickly and easily send money to friends, family, or even sellers.

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