Buying a money order with a credit cardOn February 27, 2020 by admin
A money order is a safe way to send money through the mail or make payments to companies that have restricted payment options. But if all you have is a credit card, you are probably wondering if you will even use it to buy a money order.
Buying a money order with a credit card
You can buy a money order with a credit card, but it’s not the smartest or least expensive option. When you use your credit card to buy a money order, you should do it to know how it costs. Note that even though credit card companies can purchase money orders, your options will still be restricted.
Money Order Purchases Treated As Cash Advances
Since money orders are a type of guaranteed form of payment that requires cash in advance, credit card companies treat them as a cash payment transaction. These transactions are treated the same as a cash advance. Check your credit card contract and you will see the way prepayment transactions are far more expensive than purchases and even transfers.
Your prepayment limit can be lower than the normal credit limit and in some cases it could even be $ 0. This affects the amount of money you can buy. Check the available cash advance limit to ensure that you have enough space for the amount you need, especially if you have credit on the credit card you want to use. Your credit card issuer cannot allow you to go over your limit, even if you have chosen to process it with over-the-limit transactions.
You will pay an advance payment fee on a money order purchased with a credit card. Cash advance fees vary from credit card companies and are usually the larger of 5 percent of the transaction or $ 10. If you get an upfront payment for a large amount, for example to pay the rent, the advance payment fee could be expensive. For example, you would pay a $ 50 fee on a $ 1,000 cash advance. And that’s on top of whatever money surcharge the trader charges. The fees can be very expensive, a money order with a credit card will make the purchase.
The money order purchases have a high interest rate and no grace period. Usually, when you make purchases with your credit card, paying the balance in full up to the due date can avoid any financing costs. You don’t have this option with money to buy. Cash advance rates are higher than the prices of purchases that pay interest on a money order purchase higher than a normal purchase paid the same amount.
If you have a different balance on your credit card, the expensive money to pay out will be difficult. The minimum payment always goes to the balance with the highest interest rate that your money will be around. The credit card company decides how to apply for something above the minimum and that usually the lower interest rate will be offset. The result is that your money order book (the most expensive) is slowly going down because there is so much interest growing.
No credit card rewards on money order purchases
If you hoped to rack up a lot of rewards by purchasing money orders with your credit card, you are out of lock. Credit card companies do not pay premiums on cash advances or cash equivalent transactions (or balance transfers), which does not make the purchase for a reward of your money.
Finding a merchant who accepts credit cards for money orders
Some merchants allow you to buy money orders with an EC card, but only if you have a PIN. You can withdraw your credit card cash from the ATM and then buy that money to use, but you will still pay the same fees.
If you are paying a purchase order to pay bills, check with the biller to see if you can pay them directly with a credit card. You may have to pay a convenience fee, but it will likely be a lot less expensive than buying your credit card with a money order.