If you need to pay someone but don’t want to use cash or a personal check, a money order can be a reliable alternative. It’s a prepaid form of payment that guarantees the funds, which makes it widely accepted by landlords, businesses, and service providers.
Money orders are also useful if you don’t have a bank account or prefer not to share your banking details. For just a small fee, you can send a secure payment that won’t bounce and can be easily tracked if needed.
What Is a Money Order?
A money order is a prepaid form of payment that works much like a personal check, but with an important difference—the funds are guaranteed by the issuer. When you buy a money order, you pay the full amount upfront, plus a small fee. Because the money is prepaid, the recipient doesn’t have to worry about it bouncing the way a personal check might.
Most money orders cost only a couple of dollars, depending on where you buy them. They’re widely accepted by landlords, businesses, and service providers, making them an inexpensive and secure way to send money.
How Does a Money Order Work?
Money orders are especially helpful if you don’t have a checking or savings account. Nearly 8% of U.S. households are unbanked, and for them, paying bills with cash or personal checks isn’t always an option. A money order provides a safe, trackable way to send payment without needing a bank.
Even if you do have a bank account, money orders can be useful. They protect you from the risks of mailing cash, and unlike personal checks, your account details aren’t exposed. Some people also prefer money orders for payments that may take a while to clear, since it avoids having pending transactions hanging over their account balance.
Pros & Cons of Money Orders
Money orders come with clear advantages, but they aren’t perfect for every situation. Before deciding to use one, it helps to weigh the benefits against the limitations.
Pros
- Guaranteed funds: A money order is prepaid, so it cannot bounce like a personal check.
- Low cost: Typically just a few dollars, making it cheaper than wire transfers.
- Widely accepted: Many landlords and businesses prefer money orders over checks or cash.
- International option: U.S. Postal Service money orders let you send up to $700 abroad for under $5.
- Privacy protection: No bank account or routing numbers are shared, reducing the risk of identity theft.
- Bank account not required: A convenient way to pay bills if you’re unbanked.
Cons
- Amount limits: Usually capped at $1,000 per money order, so large payments require multiple.
- Cumulative fees: Costs can add up if you buy money orders frequently.
- Not instant: Delivery and cashing take longer than electronic transfers.
- Scam risk: Buying from unverified sellers or cashing at disreputable places can lead to fraud.
- Cash-only purchases: Most issuers require cash or debit; credit cards are usually not accepted.
Where to Buy a Money Order
Money orders are available in many everyday locations, usually for just a few dollars. Prices vary depending on where you purchase them, so it may be worth comparing if you plan to buy them often.
- Post offices: The U.S. Postal Service issues domestic money orders up to $1,000. Fees are $1.20 for amounts up to $500, and $1.60 for amounts between $500.01 and $1,000. International money orders are also available.
- Retail stores: Many grocery stores, pharmacies, and convenience chains like Walmart, Safeway, CVS, Kroger, and 7-Eleven sell money orders at their customer service counters. Fees typically range around $1.
- Banks and credit unions: Most financial institutions issue money orders, but they often charge more—usually $5 to $10. This makes them better for occasional use rather than regular payments.
- Money transfer services: Companies like Western Union and MoneyGram issue money orders in person, online, or by phone. They’re widely recognized, but fees can be higher depending on the provider.
Keep in mind that most issuers require payment in cash or with a debit card. Credit cards are generally not accepted for money order purchases.
How to Fill Out a Money Order
Filling out a money order is simple, but doing it correctly ensures it can’t be altered or misused. Here are the basic steps:
- Write the recipient’s name: This is who will cash or deposit the money order. Once written, only that person or business can use it.
- Fill in your name and address: This lets the recipient know who sent the payment and gives the issuer a record of who purchased it.
- Add a memo (optional): Some money orders include a memo line where you can note the purpose, such as “Rent for June.”
- Sign the front: Your signature makes the money order valid. Do not sign the back—that section is for the recipient.
- Keep the receipt: This is your proof of purchase and includes a tracking number in case the money order is lost or stolen.
Where to Cash a Money Order
Cashing a money order is straightforward, but your options may depend on where you go and whether you have a bank account.
- Banks and credit unions: If you have an account, you can usually deposit or cash a money order at no cost. Non-customers may face a fee.
- Retailers and check-cashing stores: Grocery stores, convenience stores, and dedicated check-cashing outlets often cash money orders, though they may charge a service fee.
- Post offices: Some post office locations cash money orders that were originally issued by the U.S. Postal Service.
- ATMs and mobile apps: Some banks allow you to deposit a money order using mobile deposit or at an ATM, just like a regular check.
To cash one, you’ll need to endorse the money order by signing it and show a valid photo ID. You can then choose to receive cash or deposit the funds directly into your account.
Money Orders vs. Cashier’s Checks
Both money orders and cashier’s checks are considered guaranteed payments, which makes them safer than personal checks. The main distinction comes down to where you get them, how much they cover, and the cost.
- Where to get them: Money orders are widely available at post offices, retail stores, and money transfer services, while cashier’s checks must be purchased from a bank or credit union.
- Payment limits: Money orders usually cap out at $1,000. Cashier’s checks don’t have a limit, making them better for large purchases like cars or real estate.
- Cost: Money orders typically cost just a few dollars. Cashier’s checks are more expensive, often ranging from $10 to $20.
- Security: Both are secure, but cashier’s checks go through stricter verification processes and are harder to forge.
In short, money orders work well for smaller, everyday payments, while cashier’s checks are better suited for larger transactions that require added protection.
How to Track a Money Order
When you purchase a money order, you’ll receive a receipt that serves as proof of payment. This receipt usually includes a tracking number, which is essential if you ever need to confirm its status.
Most issuers allow you to check the progress online, by phone, or in person. Using the tracking number, you can see whether the money order has been cashed or is still outstanding—similar to tracking a package in the mail. Always keep your receipt in a safe place until you know the payment has cleared.
What to Do if a Money Order Is Lost or Stolen
If a money order goes missing, your receipt and tracking number are the keys to fixing the problem. Take them to the place where you bought the money order and request a refund or a replacement.
Most issuers charge a fee for this service—often around $15—but that’s far better than losing the full amount of your payment. Just be aware that resolving a lost or stolen money order can take time, so it’s best to act quickly.
Bottom Line
Money orders are a practical way to send secure payments without relying on cash, checks, or online transfers. They’re inexpensive, widely accepted, and guaranteed by the issuer, which removes the risk of bounced payments.
For people without a bank account—or for anyone who wants extra security and privacy—money orders offer peace of mind. As long as you buy from a trusted source and keep your receipt, they can be one of the safest and simplest payment options available.
