You can buy a money order with a credit card at most places, but your card issuer may charge a cash advance fee
Most money order sellers—post offices, grocery stores, Walmart, Western Union locations—will accept a credit card as payment. The transaction itself goes through like any other purchase. However, your credit card company often treats a money order purchase as a cash advance rather than a regular purchase, which means you pay an extra fee right away, usually 3 to 5 percent of the amount. That fee is separate from the money order fee itself (which runs 50 cents to $5 depending on the amount and seller).
Some card issuers do not charge a cash advance fee for money orders, so it is worth checking your cardholder agreement or calling the number on the back of your card before you buy. The difference between a $500 money order with and without a cash advance fee can be $15 to $25.
Key Takeaways
- Most retailers accept credit cards for money orders, but your card issuer may treat the purchase as a cash advance and charge a separate fee on top of the money order fee.
- Cash advance fees typically run 3 to 5 percent and start accruing interest immediately, unlike regular purchases which may have a grace period.
- Debit cards and bank accounts avoid the cash advance fee entirely and are the cheapest way to pay for a money order.
- Some credit card issuers do not charge a cash advance fee for money orders, so checking your terms before you buy can save you money.
How credit card companies classify money order purchases
When you swipe a credit card at a money order counter, the merchant category code tells your card issuer what kind of transaction it is. Money orders fall under codes that banks classify as cash-like transactions—similar to buying casino chips or lottery tickets. This classification triggers the cash advance rules in your card agreement.
A cash advance is different from a regular purchase in three ways: you pay a fee upfront (not a percentage of interest), interest starts accruing immediately (no grace period), and the interest rate is usually higher than your regular purchase APR. Even if you pay off the money order charge the next day, you still owe the cash advance fee and a day's worth of interest.
Which payment methods avoid the fee
A debit card is the simplest alternative. Money order sellers treat debit cards as direct bank account access, not as credit, so no cash advance fee applies. You pay only the money order fee itself.
Paying with cash or a check also avoids any card-related fees. If you have a bank account, you can withdraw cash at an ATM or write a check to the money order seller. Some banks also let you order money orders through their online banking portal or by mail, though this takes longer and may have different fees.
When a credit card makes sense despite the fee
If your credit card offers cash back or rewards points on all purchases—including cash advances—the rewards might offset part of the fee. For example, a 2 percent cash back card on a $500 money order would earn $10 back, reducing a $20 cash advance fee to a net cost of $10. Do the math before you buy.
A credit card also makes sense if you do not have access to cash or a debit card and need the money order urgently. The fee is annoying, but it is still cheaper than missing a payment deadline or paying a late fee to a landlord or utility company.
How to learn about your card charges a cash advance fee
Your card agreement lists the cash advance fee as a dollar amount or a percentage, whichever is greater. You can find this in the terms you received when you opened the account, or you can log into your online account and look for the fee schedule. If you cannot find it, call the customer service number on the back of your card and ask: "Do you charge a cash advance fee for money order purchases?"
Some card issuers have stopped charging cash advance fees on money orders in recent years, so it is worth asking even if you think you know the answer. The fee structure can also change, so if you bought a money order with this card a year ago and paid a fee, that does not may provide you will pay one today.
The total cost comparison
Here is what a $500 money order costs under different payment methods, assuming a $2 money order fee and a 4 percent cash advance fee on credit cards:
| Payment Method | Money Order Fee | Card Fee | Total Cost |
|---|---|---|---|
| Debit card | $2 | $0 | $2 |
| Cash | $2 | $0 | $2 |
| Credit card (with cash advance fee) | $2 | $20 | $22 |
| Credit card (no cash advance fee) | $2 | $0 | $2 |
The difference grows with larger amounts. A $2,000 money order costs $2 with debit or cash, but $82 with a credit card that charges a 4 percent cash advance fee.
What happens if you do not pay the cash advance balance right away
Interest on a cash advance starts the day you make the purchase—there is no grace period. If your card's cash advance APR is 25 percent and you carry a $500 balance for a month, you owe roughly $10 in interest on top of the cash advance fee. Paying it off immediately is the only way to avoid this extra cost.
Some people use a credit card for a money order because they plan to pay the card off with their next paycheck. This works, but only if you actually pay it off. If the balance sits on the card, the cost of the money order doubles or triples once interest is factored in.
Frequently Asked Questions
Do all credit cards charge a cash advance fee for money orders?
No. Most major card issuers do charge one, but some have removed the fee or never charged it. The only way to know for sure is to check your card agreement or call your issuer and ask specifically about money orders.
Can I use a credit card at the post office for a money order?
Yes, the post office accepts credit cards for money orders. The same cash advance fee rules apply—your card issuer decides whether to charge one, not the post office.
Is there a limit to how much I can spend on a money order with a credit card?
Money order limits depend on the seller, not your card. The post office caps money orders at $1,000 per order. Walmart and grocery stores typically cap them at $500 to $1,000. Your credit card limit does not change these caps, but your card issuer may have separate limits on cash advances that are lower than your regular credit limit.
What if I use a prepaid card instead of a credit card?
Prepaid cards are treated like debit cards by most money order sellers, so you should not face a cash advance fee. However, some prepaid card issuers do charge fees for money order purchases, so check your card terms first.
Does paying for a money order with a credit card hurt my credit score?
A single money order purchase will not hurt your score. However, if the cash advance increases your credit utilization ratio significantly, it could have a small negative effect. Paying off the balance quickly minimizes this impact.