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What Is a money order, how does it work, and how do I get one?

So, you’re about to make a big purchase from a private seller (such as buying a car or a laptop), and you feel weird about walking around with thousands of dollars in cash. We don’t blame you. The potential for that to turn out badly is way too high.

Luckily, there’s an easy solution. In situations just like this, people may choose to use money orders.

If you’ve never heard of a money order before, don’t worry. It’s not something that’s commonly talked about until you need one. Let’s take a look at what money orders are and when you might want to use one.

What is a money order?

First issued in 1882 by American Express, a money order is very similar to a check. It’s a certified piece of paper, usually issued by a government or financial institution, that is a prepaid deposit. The money order works like a cash deposit in that the recipient can cash it any time.

How do money orders work?

You can purchase a money order and pay for it by debit, credit, or cash. You’ll be asked to fill out a form, including details like the recipient’s name and the order amount. Since a name is attached to the money order, it's hard for anyone else to deposit it into their account.

Most money orders have a $1,000 limit for national and $700 for international orders. However, you can order multiples if you need more than $1,000. If you need to order more than $3,000 in money orders in one day, you may be asked to show government-issued identification and fill out a special form.

When a money order is issued, it includes the payer’s name, the recipient’s name, and the amount.

You’ll also receive a receipt with the money order serial number. You need to keep this receipt for your records until you know your intended recipient has successfully cashed the money order. If you don’t have the receipt and the serial number, tracing your money order can be extremely difficult.

Similar to a check, the issuer of the money order can cancel it at any time.

Most businesses accept money orders as a form of payment. That’s because unlike a check, money orders can’t bounce. To receive an issued money order, the sender has to have already paid for it upfront. So, the receiver can feel confident accepting a money order because they know it’s prepaid and, essentially, just like cash.

The recipient of a money order can deposit the balance into their account or exchange it for cash.

Where can I get a money order?

You can get a money order from most banks and credit unions, and you can actually get money orders at a lot of other places too, including Walmart, post offices, pharmacies, and gas stations. Honestly, are you even that surprised? What doesn’t Walmart sell?

Remember that you’ll have to pay a small fee when you get a money order. If your money order is lost, you can replace it for a fee.

How much does a money order cost?

Stores, post offices, and pharmacies are the most affordable places to get a money order, with the fee typically ranging between $1-$2. Banks and credit unions charge slightly more, with the average fee being $5.

Pros and cons of a money order

Before you start using money orders, it’s essential to have a clear understanding of their advantages and disadvantages.

Pros of a money order

No bank account needed

You can purchase a money order from a non-financial institution and pay for it in cash. For people who prefer to stay off the grid, this is a way—other than cash—to pay others without using a bank account.

Additionally, the person cashing the money order doesn’t need a bank account, either. They can take the money order to a financial institution and receive cash for it.

Send money internationally easily and at a low cost

Sending money transfers internationally can be expensive. However, sending a money order overseas can be a safe and more affordable option. A money order can be issued in one country and cashed in another.

Secure and safe

Money orders are a secure form of payment. It’s difficult for anyone other than the intended recipient to cash a money order, as there is a name on it.

Additionally, money orders are safe to send in the mail since they don’t include any of the payee’s banking information.

Plus, if a money order is lost or stolen, the payee can simply request to cancel it. This is much safer than having cash lost or stolen.


You know that thing you found on Facebook Marketplace that costs a few hundred dollars? You really want to buy it, but the person you’re buying it from seems a bit sketchy. Well, a money order might be the way to go here.

If you’re buying something from a stranger, you don’t always want to hand over a check that contains your personal information like your address, full name, and phone number. In these scenarios, a money order can be a great way to pay someone and remain relatively anonymous.

Seller’s request

Some sellers won’t accept checks and ask only to be paid in cash or money orders. A check can be risky because it can bounce, so some sellers feel more comfortable accepting a money order as payment.

Cons of a money order

Hard to buy with a credit card

If you’re hoping to purchase a money order with a credit card, you might find it hard to do so. Many vendors only accept debit or cash for money orders.

If you're lucky enough to find a place that accepts credit cards, know that the transaction will appear on your credit card as a cash advance. This means you’ll pay an exorbitant interest rate daily on the transaction until you pay it off. The lesson here: only get a money order if you have the money to pay for it by cash or debit.

Can’t reverse a money order

You can stop a money order before it’s been cashed out. However, once the money order has been cashed, it cannot be reversed.

Difficult to track

Unlike a check, money orders aren’t tied to a bank account. This means it can be quite hard to track a money order or find out if and when it’s been cashed.


While many banks offer e-transfers for free, money orders come with a fee. Some places even charge the recipient a fee for cashing the order.


A money order can be a bit of a hassle to acquire. Even though they’re offered in many places, you still have to find somewhere that gives them, potentially take out cash, stand in line, and deliver the money order to the recipient. In comparison, an e-transfer simply takes a few clicks on your phone or computer.


Money orders have limits between $700-$1,000 per order. Of course, you can take out multiple money orders, but then you’re incurring a fee per order, which can add up.

Let’s say you’re purchasing a car that costs $10,000. You’ll have to go through the hassle of getting several money orders, paying fees, and safely carrying them all around.

Acceptance issues

Generally speaking, money orders are accepted by most vendors. But some organizations, such as insurance companies and brokerage firms, tend not to accept them.

Additionally, while you can deposit checks online these days through mobile banking, you cannot do that with a money order.

Delayed funds

If you’re cashing the money order at a financial institution that didn’t issue it, a hold may be placed on the order, and your funds will be delayed.

Money order scams

Anyone dealing with a money order should be aware of fraudulent money order scams (more on that below).

Be aware of money order scams

Money orders are typically a secure form of payment. Still, that doesn’t mean they’re always entirely safe, and you should be aware of money order scams.

One of the most common money order scams is a fraudulent money order. In this situation, the payee gives you a fake money order where they’ve overpaid you, you deposit it, and they ask for some of the money back. You can access the funds immediately, so you send them the money.

By the time your bank realizes the money order was fake and removes the funds from your account, your scammer is long gone with their winnings.

A key warning sign for this type of scam is:

  • Someone who seems in a rush to have you deposit the money order immediately

  • Someone who's paying you more than you need and asking for you to send some money back

Unfortunately, financial institutions can’t always tell what’s a fraudulent money order right away. They’ll often clear a fake order, allow you to have the funds, and realize the mistake several days later. That’s why you should only accept money orders from people you trust.

Is a money order right for you?

You’ll need to consider your circumstances and preferences before deciding if paying or accepting a money order is right for you.

Paying with a money order

As we’ve outlined, money orders have some clear advantages. A money order can be a great choice if you’re making a purchase over a few hundred and don’t want to carry that sort of cash around. However, if your purchase is several thousand, it might be better to pay with a check.

Always consider the fees when opting for a money order. If you need to pay $3,000 to someone, are you willing to pay the $6-$15 in fees for the money orders?

Lastly, always check that the recipient is willing to accept a money order before you bother to get one.

Accepting a money order

Money orders are generally safe forms of payment, but, as we’ve highlighted, there are money order scams that can be hard to catch. You might be given a fake money order, just as you might be given a check that ends up bouncing.

If you're ever accepting a large payment, consider asking for cash or going to the bank for a direct transfer.


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