Money orders are that form of payment that’s often unloved and ignored. Yet they could also be the most useful way to pay in some situations. You probably have heard of money orders before such as at a point of sale system where the payment methods accepted may have included money orders. But you’re probably wondering “why should I use money orders?” or “where do you get money orders from?” The next sections will provide answers to those questions.
The Essentials On How Money Orders Work
If you’ve never used money orders before, you could think of them as certified documents that guarantee payment to another party as soon as they receive them. Or, a better way to define them could be to think of them as prepaid checks. Basically, money orders are bought from places that issue them, and the person who buys them then designates who will receive the payment just as they would if they were writing a check. But here’s a few differences between money orders and checks:
1. Personal checks can only be used by people with checking accounts at a bank, while money orders are separate purchases that don’t require bank accounts
2. Personal checks are written on good faith by the sender that they have enough funds in their account to send the money, while money orders are guaranteed since they’re paid for upfront
3. Personal checks have no limits on the amounts that can be written, while money orders usually can’t be purchased for larger amounts than $1,000, or in some cases less depending on which country they’re sent to.
Basically, you can send money orders to your recipient and confirm they received them. There’s also options to stop payment if you realize you need to do so and they haven’t cashed or deposited them yet.
Places You Can Buy Money Orders
You aren’t just limited to banks or credit unions when you want to buy money orders, although those places do offer them. But chances are your local post office, grocery store, favorite retailer and other government agencies in your neighborhood also sell money orders. The main thing to keep in mind is that these different places will all charge different fees for purchasing, tracking or cancelling money orders. Some may not allow you to cash them or may have limits on how much you can cash out. So make sure you check on the policies of the places you plan to buy or cash money orders at.
Buying Money Orders Online
Technically you can’t buy a traditional money order online, but you can use a money transfer service to send money in ways that work a little like electronic money orders. You can designate a payee name in the appropriate field, and you can have it sent to their country where they can do a cash pickup at a local agent. While not the same as having money orders delivered to their doorstep, it’s still usually reliable when you want to send money without the hassle of having to go down to your local retailer to do it.
Paying For Money Orders With A Credit Card
Most places that sell money orders will allow you to pay for them the way you would most other things. So cash, checks, debit cards and credit cards are usually all accepted. But be warned that since buying money orders could be tagged as cash withdrawals, credit card providers could charge cash advance fees on them which could get quite hefty if you aren’t careful. This is especially true of electronic transfer services. You should always check with your credit card provider to see what could trigger a cash advance, and if you do decide to go ahead and use it you should make sure you pay the advance fees off right away.
Other Reasons To Use Money Orders
Money orders not only provide reliability for sending money in the mail, they greatly reduce the risk that that money could be stolen or expose the identity of the person sending. For example, you may not want your name, address and phone number out there which is what usually happens if you write a check. Money orders don’t require the sender to put their details on them. Whenever you purchase money orders, it’s usually best to hold onto the receipt because this will have the important information needed in case you have to track and cancel them. Some issuers even allow you to lookup money orders online to check the status.