What's a money order & when should I use one?

Are you nervous about making a big purchase? Do you feel uneasy carrying large amounts of cash?

If so, it might be time to learn about money orders as alternative ways of paying for things.

A money order is a prepaid check you can buy from a store, financial institution, or through the postal service. It usually has a small fee, and can be in the amount of up to $1,000. It's a safe, secure alternative to cash or personal checks.

Money orders are used for:

• Paying bills or making down payments.

• When you feel uncomfortable having a lot of cash on hand for a purchase.

• Sending money internationally.

• Making purchases without a checking account.

Sometimes using a check or giving out your bank info may feel risky, like if you were meeting up with someone you met online to purchase furniture. Other times a place may not take checks or cash. This is when a money order is useful!

Pros:

• Payment is guaranteed. There's no risk the money order will bounce because it's prepaid.

• They're a safe alternative to sending cash. Only the person named on the money order can redeem it.

• No bank account is needed. You don't need a checking account to send one.

• They can be sent internationally. Some places will let you send money orders to different countries.

• Less personal information is used. Money orders don't need info like your bank or routing number to be sent.

• They can be replaced if lost. Money orders can be replaced as long as you have a receipt for it.

Cons:

• The amount is limited. Most money orders can't exceed $1000, so you may have to send multiple money orders for a very large sum of money.

• They have to be purchased in person. You can't purchase a money order online.

• They take longer to process. A money order either has to be cashed in somewhere that accepts them or deposited into a bank account, which could be slower than a digital transfer.

• They're hard to reverse. You can't reverse a money order if you sent it to the wrong person and they've already cashed it!

• They include a processing fee. However, the fee is usually minimal ($2-5).

Now that you know what a money order is, consider using one the next time you need to make a big purchase!