Money order costs vary by provider and how much you borrow. View More How Much Does a Money Order Cost? You must visit a retailer, bank, or post office that offers money orders. Money orders do not provide an online option. You must purchase a money order in person: You can get checks mailed to your door and conduct online transactions with debit and credit cards.The $1,000 maximum doesn’t provide much flexibility: You would have to buy multiple money orders to exceed $1,000.If you spend the cash on a fraudulent money order, you are responsible for paying the difference with the remaining funds in your bank account.
Money orders can be fraudulent, so you shouldn’t spend them until the funds make it to your bank account. You will have to complete several forms to request tracking, and it can take several weeks to determine if someone cashed out on your money order. You don’t have the same luxury with money orders. Money orders have less tracking and are more susceptible to fraud: People use checks in part because you can track if the personal check got cashed.You may have to wait several weeks for the money order to process if you use a different bank than the money order’s issuer. Delays: Money order proceeds don’t automatically appear in your account after a deposit.Fees are higher if you use a credit card to obtain a money order. You can deposit money orders into your bank account without paying a fee, but the costs vary based on how you receive and use the money order. Fees: You may have to pay fees to obtain a money order and cash it out.On the other hand, if you want to write a personal check, you must have a checking account. You don’t need a bank account: Consumers can obtain money orders even if they do not have checking accounts.You are not restricted to cashing out the money order in the country where the money order got created. Overseas flexibility: You can cash the money order in a different country.If you don’t feel comfortable with this information floating around, a money order is the better choice. Money orders do not have personal information: A check contains your name, address, routing number, and bank account number.The check’s recipient may trust you less after the bounce. You may forget about the check by then and pay an overdraft fee for the bounced funds. The person who receives your check may deposit it a few weeks later. Money orders are prepaid: You don’t have to worry about a check bouncing.We have outlined the main advantages and disadvantages below. Before using a money order, you should assess the pros and cons to gain a deeper perspective. Pros and Cons of Using a Money OrderĪ money order is one of several payment methods you can use. Unlike a check, a money order does not contain any of your personal details. A money order also helps when you do not want to provide personal information. In other cases, you would have to pay a fee to use your money order. Postal Service does not charge fees if you cash out a money order you received from them. This is because you can get lower fees or pay nothing on the transactions. If you receive a money order, you should primarily use it with the company that gave you the money order. This safeguard is more important for people low on funds in their checking accounts. When Should You Use a Money Order?Ī money order is a prepaid check which protects you from a bounce. Money orders have a $1,000 limit which doesn’t give you much room, but you can get multiple money orders to exceed the limit. Your payment for the money order becomes the balance. Money orders are essentially prepaid checks. American Express issued the first money orders in 1882, giving people a more convenient payment option. Money orders are an older payment method that was popular before traveler’s checks. View More What are Money Orders, and How Do They Work?
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