If you don't have a checking account and look for a safe, secure, and quick payment method, you may consider money orders issued by governments, banks, and other eligible entities. Here is everything you need to know about money orders, how they work and if this service is convenient.
What is a Money Order?
A money order is a payment method for a certain amount of money that two parties can use to trade for specific goods or services. To acquire a money order, you must pay the agreed-upon price and a service charge for an item or service. In contrast, to check, money orders are prepaid.
How Does a Money Order Work?
To purchase a money order, go to a business that offers these services and fill out a purchase application form.
To fill out a money order, you must provide the recipient's name, address, the amount of the money order requested, and a card to pay for the money order. Money order providers may occasionally question the purpose of payment. That is why it is a good idea to think about the reason ahead of time.
Make sure to double-check the fields for accuracy, and then send the money order to the receiver if you're confident that everything is in order. If you're mailing the money order, get tracking information to ensure it doesn't get lost in the mail. It is critical for the buyer to maintain the money order receipt. Remember that the receipt acts as evidence of purchase and transfer tracking information, allowing you to prove when the money is put by the recipient. If you believe your money order has been lost or stolen, you must inform the supplier immediately.
How and Where to Buy a Money Order?
To buy a money order, an individual must fill out a form with the receiver's name and the amount that the recipient should receive. Mostly money orders are available for small amounts of money with the maximum range of $1000. So, if a customer needs more than the specified amount, he must place numerous orders. Here is where you can buy a money order:
Banks, Credit Unions, Payday Lending Offices
If you decide to take out money orders from banks, you should be ready to pay a few dollars more than if you will buy from a store. The bank fees may range from $5 to 10 dollars for each purchase. Though the difference may not seem significant if you purchase them at times, you should find another option if you are a frequent buyer of money orders.
US post offices
Having a reputation of being a safe place for buying money orders, the USPS (United States Postal Service) is another option. Money orders from postal offices cost 1,45 for up to $500 and $2 if the purchase exceeds $500. However, in terms of convenience, these offices are not the best ones, as apart from the fact that not all the offices issue money orders, you will have to wait in long queues.
Retailers (grocery stores, supermarkets, grocery, and convenient stores, pharmacies)
If you are looking for a cheaper and more convenient option for buying money orders, retail stores may be the best choice. Though the price for purchasing money orders from retailers varies, the maximum does not exceed $2 for each purchase. Find a MoneyGram or Western Union logo at stores to find where money orders are available.
Though there may be many sources available in cities, you should consider prices and the location to find one that fits you most.
How to Cash Money Orders?
The cashing of money orders is much like checks. You can also deposit it to your bank account to use the funds. Until it is not cashed or deposited into your bank account, this piece of paper doesn't make sense.
You can cash money orders at various places, including banks and convenience shops, and payday lending offices.
Cashing money orders is very simple and doesn't require extra skill. All you have to do is:
- Go to the places (banks, credit unions, retailer stores, postal offices) where you can cash these products
- Endorse the money order as you would with a check
- Verify that you are eligible (you may show your ID, driving license, passport) to cash the money order
- Pay any costs associated with the service and get your cash
If you don't want to use the total amount of your money order, it would be better if you deposited it into your bank account. Then, you can cash it any time later or send money to someone else. If you don't have a bank account, you may use the money order to create one, saving you time and money.
Money Orders: Pros and Cons
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If you wonder whether this payment method is good for you or not, it will be better to consider its advantages and disadvantages.
The Advantages of Money Orders
- One of the main pros of these options is that money orders do not require having a bank account.
- Personal information such as your bank's routing number and account number are not included in money orders.
- It is a convenient option for overseas transfers.
The Disadvantages of Money Orders
- In-person acquisition of money orders is the first disadvantage of these payment options; when everything goes digital, you don't want to spend your precious time in stores or banks to purchase them.
- The limited amount is another con. So, if your payment exceeds $1000, you will need to purchase more than one money order paying separate charges for each.
- While money orders may not significantly affect your budget, the fees will add on if you adhere to these options more frequently.
- Finally, money orders are more prone to falling prey to fraudsters.
Conclusion
Money orders can be helpful in some scenarios, particularly if you do not have a bank account. These payments are more secure than checks. On the other hand, a money order may not be the best option when you need a guaranteed payment. So, before purchasing a money order, you should weigh all of your options and then decide.