You probably know that it can be difficult to cash an old check right now. As a result, people began to ask about money orders. Fortunately, in most cases you will not have to worry about the expiration date, but it is important to pay attention to some points that can affect the cost of a money order. So, learn what a money order is, how it works and how much it costs.
How do money orders work?
You can purchase a money order up to $ 1000 and you also have to pay a fee depending on the place where you buy the order. Even if you don’t have a bank account, you can still receive a money order.
How do money orders work?
As already mentioned, you can purchase a money order worth up to $ 1000. This amount may vary depending on where you buy the order. Also note that you will have to pay a small fee. Often times you will not be able to use a credit card to purchase a money order, however you can use cash, debit cards, or even a traveler’s check. You can try to buy money order with a credit card from some sellers, but you will most likely have to pay a large commission for it.
Further, after you have purchased a money order, you can fill it out and give it to the recipient. Also, many people send money orders by mail. Once received, the recipient will be able to cash it out or deposit it into his bank account.
If you are the recipient of the money order, you can transfer it to a bank account for free. However, if you want to cash it out, you can do it at your bank or other financial institution that accepts paper orders. However, please note that you will have to pay a few dollar fee. However, the post office cashes USPS money orders for free.
What is money order?
A money order is a paper form of payment that can be used to pay a specific person or company. As with a check, the recipient can cash out the money order as well as deposit it into a bank account. The advantage of a money order is that it does not tied to your bank account, so your information remains secure. It is also worth noting that a money order is prepaid. It is also important to mention that money orders have limits. For example, at the United States Postal Service you can’t purchase a money order for more than $ 1000.
People use money orders as they allow unbanked and underbanked individuals to get access to additional payment options. Thus, even if you do not have a checking account, you can still get a money order. It is also a safe way to get funding. If a check is mailed it could be stolen. Moreover, it contains your bank account number. Thus, unlike a check, money orders do not contain banking information and cannot be stolen like cash.
How much does a money order cost?
Of course, you should be aware that the cost of a money order may vary depending on the state of purchase and the issuer. Thus, it is important to compare offers and commissions in order not to overpay high fees, especially if you use money orders a lot. Typically, the commission ranges from $ 1 to $ 2. Important! It can be more expensive if you buy a money order from a bank, so explore other options before deciding.
What are the advantages and disadvantages of money orders?
Of course, before using money orders, there are advantages and disadvantages that you should study. Pay attention to the main ones:
- Safety. As already mentioned, money orders are much safer than cash or checks, so no one can steal your money. Moreover, money orders are usually made out to a specific person, so he is the only one who can cash out this order.
- Bank account. Another significant advantage of money orders is that you do not need to have a bank account in order to receive it. Thus, money is guaranteed to you.
- Purchase of money order. Many people find it rather inconvenient that money orders have to be purchased in person, so they are not the most convenient form of payment.
- Limits. Also, money orders have a maximum purchase amount of up to US $ 1000 in USPS, which limits their convenience.
- Fees. Another significant drawback of money orders is fees. Of course, it won’t be as meaningful if you don’t use it on a regular basis. However, your expenses are more likely to increase if you use money orders all the time.
- Fraud. It is important to note that money orders are also frequently used in fraudulent activities. Often scammers provide people with fake money orders and ask them to return some of the money back. Most often, by the time a person realizes that the order is fake, the fraudster has already received his money. This is why it is important to be very careful.
Do money orders expire?
The question that worries most people is whether money orders have an expiration date. Fortunately, as a rule, money orders do not have such a deadline, so you can cash out the order regardless of its age.
However, it is important to pay attention to fees. If you have not cashed out a money order for a year or more, then issuers may charge a fee, which often varies. You should also know that the U.S. Postal Money is an exception, as their money orders never expire. Thus, orders do not lose value and you can cash them out at any time, regardless of age.