What is a money order? If you’re asking this question, chances are you’re looking for a simple way to send money. In the digital age, a money order may seem old-fashioned, but it’s still a popular way to send money to loved ones, to pay a bill, or to buy goods, in the United States.
With our guide, find out everything you need to know to buy a money order, safely send one, and discover some alternatives.
Important Update: The United States Postal Service will no longer offer international money orders after September 30, 2024.
What is a money order?
A money order is a prepaid paper payment method. It’s like a personal check that can’t bounce.
When you write someone a personal check, the person receiving the check has to trust there will be enough money in your account when they cash it.
With a money order, you pay for the value of the money order in person at the point of purchase. That way, the person receiving the money (the payee) has a guarantee they will receive the value of the money order from you (the payer).
Once you have filled out the money order and paid for it, you can give it to the person named on the order, either in person or by sending it in the mail.
There are two types of money orders. You can buy a domestic money order for payments sent within the U.S or an international money order for payments sent outside the country.
Where can I get a U.S. money order?
You will need to buy a money order in person. If you’re used to online banking, this may be something of an inconvenience. Fortunately, there are plenty of places where you can go for a money order.
Here are some of the places where you can buy a money order in the U.S.:
- The U.S. Postal Service (USPS)
- Some retail banks and credit unions, like Wells Fargo or Chase
- Western Union branches
- Some grocery stores, convenience stores, and other retailers, like CVS, Walmart, Kroger, Publix, 7-11 and Safeway, often in partnership with MoneyGram
- Check-cashing and payday loan stores
All of these places will charge a fee for creating a money order. It’s usually pretty low for domestic money orders, but international money orders can be more expensive. There might also be different fees based on the value of the money order.
For example, for domestic money orders, the USPS charges $1.65 for amounts up to $500 and $2.20 for amounts between $500.01 and $1,000, as of this writing.
Double-check the cost before choosing where you get a money order—the most convenient spot may not be the cheapest.
You’ll need some information about the person you are sending the money order to and a form of payment.
Some money order locations allow you to use a credit card as a form of payment but not all. If you do pay by credit card, extra charges may appear on your credit card bill. This type of transaction on a credit card is usually considered a “cash advance.” Most financial institutions charge a fee plus high interest rates on cash advances.
It’s usually best to pay in cash, with a debit card, or with a traveler’s check.
You also may need to show a photo ID at the time of purchase.
How to fill out an American money order
Once you’ve bought your money order, you need to fill out the document.
These are the steps to fill out a money order:
- Fill out your name and address in the “From,” “Sender,” or “Remitter” field.
- Fill out the name of the person you are sending the money order to in the “Pay to the Order Of” field.
- Sign the front of the money order.
- Keep your receipt to track the money order. You’ll need the receipt if your money order is lost or stolen or if you need to cancel the payment.
You may also be asked for information for an anti-money laundering form. For example, the USPS must submit a form when a customer purchases $3,000 or more in money orders in one day.
International money orders
An international money order works similarly to a domestic money order, but it allows you to send funds to recipients in other countries. They’re becoming less common, however.
International money orders are issued in the currency of the destination country, providing added convenience for the recipient.
How to get an international money order in the U.S.
As of September 30th, 2024, the United States Postal Service will no longer offer international money orders.
How much do international money orders cost?
International money orders tend to have higher fees than domestic ones. For international money orders, the USPS charges an issuing fee of $49.65 plus a processing fee based on the country you’re sending the money order to.
Remember, the USPS won’t issue international money orders after September 30, 2024.
Money order scams
Scammers sometimes use money orders, so it’s important to keep an eye out for potential scams when buying them or accepting them as payment from someone you don’t know.
When buying money orders, be aware they are only sold in person at official providers. If you are offered to buy a money order online in the U.S or at a “discount,” you can be sure it is a scam.
When accepting money orders as payment, make sure it’s not counterfeit. Some scammers attempt to pay for goods with counterfeit money orders. By the time you realize the money order is a fake, they’re gone.
There are a few ways to tell if a USPS money order is counterfeit. Hold it to the lights, and you should see a watermark of Benjamin Franklin on the left-hand side. Check the dollar amount, too. There should not be any discoloration of the numbers, and the amount should not exceed $1,000 for domestic money orders.
You can also verify a money order’s funds and legitimacy by calling the number on the back. The bank or company that sold the money order can determine if it’s counterfeit.
Pros and cons of money orders
If you can use a money transfer app or write a check—why use a money order? Here are a few considerations.
Pros
- Neither you nor the person you are sending money to need a bank account.
- There are often lower processing fees than a wire transfer.
- It’s safer than carrying or sending cash.
- Unlike a paper check, the sum is guaranteed.
- You can track your money order and get a refund if it is lost or stolen.
- You can cancel a money order if needed.
Cons
- It’s slow—sending a money order by mail could take days.
- There is potential for scammers to sell or pay with counterfeit money orders.
- Sending an international money order can be expensive.
- A money order must be bought in person.
What are the alternatives to a money order?
There are several different payment methods you could use to transfer money if you don’t want to use a money order.
You could send money directly from your checking account to another person’s bank account with a wire transfer or ACH, send a cashier’s check, use a peer-to-peer payment service like PayPal, or use a mobile payment service like Remitly.
For a wire transfer, you will need to know the payee’s name, their checking account or savings account number, and the SWIFT or BIC code of their financial institution. There is usually a fee, and it will be a few days before the money turns up.
ACH (Automated Clearing House) is an electronic transfer of funds between banks. It’s the domestic equivalent of a wire transfer. This is a good way of making a payment directly into a bank account within the same country.
Like a money order, a cashier’s check is a paper payment guaranteed by the issuer. To get a cashier’s check, your bank takes the money from your account and transfers it to their own.
The bank then issues the check from its account to the person you want to pay. This way, the person receiving the money has a guarantee the check won’t bounce due to insufficient funds. You could deposit that check in another country. However, there will likely be fees involved.
It’s possible to avoid banks by using a service like PayPal, which is used internationally. But again, PayPal’s fees for transferring money to another country are pricey.
All these payment options require the person receiving the money to have either a bank account or mobile phone. A simple money order does not, which is why it is still a popular way to send money overseas.
However, there is another option: a mobile payment service like Remitly. This payment method combines the convenience of using a digital payment with the simplicity of a money order.
You make the payment online, but the person you are sending money to can pick up cash in person, receive it to their bank account or mobile wallet, or even get it delivered right to their door.