They are a widely accepted way to make a payment, they never expire and if they are lost or stolen, they can often be replaced. Knowing the ins and outs of how to acquire and use money orders allows you to add this dependable tool to your financial toolkit. Courtesy of Smithsonian National Postal Museum. How We Make Money. Mitch Strohm.
Written by. Edited By Mary Wisniewski. Edited by. Mary Wisniewski. Mary Wisniewski is a banking editor for Bankrate. She oversees editorial coverage of savings and mobile banking articles as well as personal finance courses. Reviewed by. Kenneth Chavis IV. Share this page. Bankrate Logo Why you can trust Bankrate. Bankrate Logo Editorial Integrity. Key Principles We value your trust. Bankrate Logo Insurance Disclosure. Don't sign the back. That area is for the person who receives it. Your receipt will come as a detachable part of the money order you just filled out.
You might also receive a separate receipt from the cashier when you buy the money order. Keep your receipt as your proof of payment and store it in a safe place. If you lose a money order or make a mistake filling it out, you may be able to cancel it and get your money back if you take certain steps. The receipt will provide helpful information in such a situation. When you know how to fill out a money order correctly, you have a good option for transferring money. Unlike writing a check from a personal bank account or handing over cash, a money order gives you proof of payment and assures the recipient that the funds are guaranteed.
To fill out any money order — including a MoneyGram money order, a Western Union money order or a Chase money order — follow five simple steps:.
Steps to fill out a money order: Quick summary. Fill in the recipient's name. Keep your receipt. Depending on where you're purchasing your money order, these lines could have different names, such as "Sender"," "From," "Purchaser," or "Remitter. Some money orders will want you to provide your name in this section, while others will want you to provide your address. Still others may ask you to provide both pieces of information.
If your money asks for your name, be sure to use your full legal name. And if you're required to provide an address, make sure that the one you provide is your current mailing address. Next, you'll need to add your signature. With most money orders, the sender's signature line will be on the front at the bottom right-hand side.
You'll also notice a signature line on the back of the money order: This is where your recipient will need to sign when they go to cash your money order, so you'll want to leave that line blank. Now that you've filled out all the necessary sender and payee information, you can purchase the money order.
You can pay for your money order with cash, a debit card, or a traveler's check. Some stores may also allow you to use a credit card to purchase your money order. However, you'll want to ask the provider how the transaction will be processed. Some stores will run money order purchases as credit card cash advances , which could cause you to rack up fees and interest charges.
You'll need to pay the cash amount in addition to a transaction fee. Thankfully, these fees are generally reasonable. Once payment has been made, you'll receive a receipt that is proof of your purchase. You'll want to save this receipt in a secure location for two reasons.
First, your receipt will include tracking information. Using the tracking number on your receipt, you can check to see if, and when, your money order has been cashed.
If you feel there was a problem or mistake, contact your money order issuer for help. Second, you can use your receipt to replace your funds if your money order is lost or stolen. However, you should be aware that most providers will charge an additional service fee when refunding lost or stolen money orders. One of the most inexpensive places to buy a money order is Walmart. Currently, Walmart charges a maximum fee of 88 cents. Finally, many grocery stores and convenience stores that you already frequent each week may sell money orders.
Just keep an eye out for Western Union or Moneygram logos at those retailers. Money orders are an affordable and secure guaranteed form of payment. However, they won't be the best fit for every situation.
If you have a bank account, a cashier's check, certified check, or wire transfer may be better options for large transactions. If you're not a bank customer, you may just need to pay with cash. Also, since a money order can't be used for online transactions, it's not a good replacement for a bank account if you want online bill-pay services. If you're looking for a way to pay your bills online without a bank account, a prepaid debit card could be one of your best choices. Disclosure: This post may highlight financial products and services that can help you make smarter decisions with your money.
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However, there are several excellent reasons to choose a money order over other forms of payment: They provide unbanked and underbanked individuals access to additional payment options. They are a secure form of payment to send through the mail.
Cash in the mail can be stolen, and personal checks include your bank account number, which you may not feel comfortable sharing with the recipient. They are more secure than carrying cash. If you need to purchase an expensive item, you may feel uncomfortable carrying cash.
For instance, if you purchase a sofa from someone at a site like Craigslist or Facebook Marketplace, you may choose to bring a money order for the purchase rather than cash. They are the preferred form of payment for some transactions. This is common with private party car sales or online person-to-person sales. How to Cash a Money Order If you are the recipient of a money order, you can generally deposit it into your bank account for free.
The Downsides of Money Orders Although money orders serve a useful purpose, they do have several drawbacks. Bottom Line Money orders may not be a go-to alternative when other payment options are available, but they are a more secure form of payment than cash. Was this article helpful? Share your feedback. Send feedback to the editorial team. Rate this Article. Thank You for your feedback!
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