Money orders can be a viable option if you want to send safe, easy payments but need a checking account. They are also highly accepted as a form of prepaid payment since they are supported and covered by the issuer against default or inability to pay. Whether you are paying bills, buying items, or sending money to someone, a money order is a safe alternative to cash or personal checks.
In this guide, we will explain money orders, when to use them, how to fill out a money order correctly, where to get them to help you decide whether they are the best option for your payments.
What Is a Money Order?
A money order is a prepaid payment in paper form, meaning the cash is paid in advance to an issuer. Money orders are good funds, unlike personal checks, because they do not bounce due to insufficient funds in one’s bank account. Because of this, money orders will be a safe way to pay bills, buy goods, or send money for those who need a checking account or want not to use personal checks.
Western Union and the USPS are some common money order providers. Their money orders are widely accepted for paying bills, rent, or even personal debts.
When to Use a Money Order?
Money orders are perfect for those who need a safe, guaranteed way to pay for something and do not want to use cash, personal checks, or digital payments. Here are some common scenarios where a money order might be the best option:
- For those who still need a checking account: Money orders are best suited for people who do not have access to a bank account or would not like to carry large sums of cash.
- Payment of items or services: Many stores and businesses accept money orders as a form of payment, so they are good for buying items or services.
- Pay bills: Some companies may require or prefer a money order to pay a bill or to pay by mail.
- Send money safely: Money orders are a safe way to send money to someone because they are issued in the recipient’s name and can only be cashed by that recipient.
Money orders are an excellent way to pay lesser amounts, but if the amount is more significant, certified and cashier’s checks would be more applicable. These options are better secured but have a higher price tag.
How to Fill Out a Money Order
Filling out a money order is easy, but accuracy is important to avoid potential problems in processing. Read on for a step-by-step guide on how to fill up a money order:
- Fill in the recipient’s name: On the “Pay to” or “Pay to the order of” line, fill in the name of the person or business you are paying. This way, only the recipient can cash the money order.
- Write your address in the “Purchaser” section: By writing your name and address, you will become the person purchasing the money order.
- Include payment details in the memo field: The memo section is optional, but it is a good idea to use it for additional information, such as an account number or invoice number. This ensures the payment is properly credited.
- Sign your name: You need to sign the money order in the purchaser’s area provided for the purchaser. It is your proof that you are purchasing it. Do not sign on the back of the money order; it is left to the payee when they cash the money order.
- Retain the receipt: Once you obtain a money order, you receive a receipt. Save it because you might want to trace the payment or reverse the money order at any point.
Where to Get a Money Order
There are numerous places where you can find money orders, and among these places are:
- Retail stores: Big box retailers such as Walmart, CVS, and Rite Aid sell money orders with extended hours, so you can get one when needed.
- U.S. Postal Service (USPS): Money orders are also available at USPS locations. Many are open on weekends and evenings, making it convenient to use.
- Financial institutions: Money orders are also available from some banks and credit unions, although fees may be higher than at other establishments.
When you buy a money order, the issuer is likely to fill in the date and amount. You should fill in the rest in hand. The prices of money orders range from $1 from a retailer such as Walmart to $3.40 when one buys at USPS based on the amount being bought.
Most money orders have a limit of $1,000, but if you need to send more than that, you can purchase multiple money orders.
How to Deliver a Money Order
Once you have filled out your money order, the next step is delivering it to the recipient. You can either:
- Mail the money order: Just put the money order in an envelope and mail it to the recipient. Make sure you keep the receipt for tracking purposes.
- Hand-deliver the money order: If you are handing the money order directly to the recipient, make sure they sign it in the section provided when they receive it.
Remember, only the person whose name appears on the money order can cash it, so you can feel confident knowing that the payment is secure.
How to Cancel or Replace a Money Order
If you lose a money order or need to cancel it for any reason, contact the issuer right away. To cancel or replace a money order, you will need to:
- Fill out a cancellation form
- Provide your receipt
- Pay cancellation fee
Depending on the issuer, you may receive a refund or a replacement. Prepare to wait up to 30 days for the process to take effect.
Conclusion
Money orders are an excellent way to make safe and secure payments, especially if you do not have a checking account or prefer to use something other than cash. They are great for smaller amounts, but there are some limitations: the cap is $1,000, and there may be delays in canceling or replacing a lost money order.
Overall, if one needs a reliable payment method, a money order is all they need. It is a simple, secure way to handle transactions, whether on bills, purchases, or sending money home to loved ones.