GetOutOfDebtHub – Page 3 – GetOutOfDebtHub

Are you unbanked and need a way to make payments or purchases? Are you looking for a secure way to make payment to another party? Or do you want to try another payment option aside from wire transfer, cashier’s check, e-transfer, and co? A money order is your best bet. But what is a money order? A money order is a paper certificate from a bank or financial institution that serves as cash and can be used to pay another party. Are you looking to use a money order to make a payment or purchase? If so, it's important you understand what it is, how it works, and where it can be purchased from. I have highlighted all these below. Money Order vs Cashier’s Check What Is a Money Order? A money order is a paper certificate from a financial institution that serves as cash and can be used to make payments to another party. Since it is issued by a registered bank or institution, it is a guaranteed form of payment that is widely accepted instead of a check or cash payment. While a money order may appear like a check, it doesn't function like it in some ways. Anyone can purchase a money order, regardless of whether he has an account. Having understood what a money order is, you might want to know how it works. Money orders are similar to prepaid checks. You provide the funds in advance and fill out an order that, like a personal check, is endorsed to a certain recipient. You don't need a bank account to buy a money order, which makes it a useful way to pay bills, especially for the unbanked. It is also more secure than both cash and personal checks. You can safely send one via the mail, it doesn't have any account details, and since it's prepaid, it won't bounce when deposited or cashed. You can buy money orders from most financial institutions, but they are also available at many convenience stores, supermarkets, and money transfer and check-cashing companies, including the U.S. Postal Service. One option is to look for local branches of Western Union or MoneyGram, which are often seen inside stores like Walmart, CVS, and 7-Eleven. Money orders are generally sold in amounts up to $1,000, although the Postal Service limits international money orders to $700 (or $500 if bought for El Salvador or Guyana). There is no minimum, but you’ll have to pay a fee for each order. These fees aren't the same. They vary depending on where you purchase the money order from. For instance, Postal Services charges $1.20 for money orders up to $500, $1.65 for those between $500.01 and $1,000, and $8.55 for international transactions. Wells Fargo charges a flat fee of $5. You may find less expensive or even fee-free money order options. Amscot, a Florida-based financial service company, offers money order purchases at zero charges. Remember that these fees are for one money order. If your transaction exceeds the maximum allowed, you may have to buy many orders and pay a fee for each, which can accumulate quickly. If you use money orders frequently, save money by buying from an institution that offers the lowest fees. How to Cash a Money Order? You can generally cash money orders in the same place you can buy them; banks, credit unions, and stores that offer check-cashing and other financial services. Some traditional financial institutions may allow you to put money orders through mobile or electronic deposit, while others won't. When you are prepared to cash or deposit a money order, sign the back like you do a check. When cashing in person, you’ll need a means of identification, like a driver’s license or passport. Depending on where you cash your money order, you may pay a small check-cashing fee. How to Get a Money Order? You can buy money orders from banks, credit unions, post offices, check-cashing shops, and local retail stores like supermarkets, convenience stores, and pharmacies. To find Western Union and MoneyGram locations where you reside, input your ZIP code into their locator tools and filter for sites that sell money orders. While it may be convenient to buy a money order from your bank or a store you are already visiting, keep in mind that charges vary widely, and it may cost less to buy at another place. In most cases, you’ll have to purchase money orders in person. You can buy money orders with cash, check, debit or credit, though not all issuers accept debit or credit cards, and some may process credit transactions as cash advances, which have higher fees. Besides a method of payment, you'll need to provide the recipient's name and, depending on the form, your name, and address. If you are using the money order to settle a bill, like your utilities, you may also need to provide an account number so that the recipient knows how to apply the money you send. How Much Is a Money Order? Other Alternatives to Improve Your Financial Health: Don’t want to use money orders? Here are other alternatives to try out: Open a checking account: A checking account comes with a debit card, checks, electronic transfers, and autopay/bill pay options for comfort. A bank helps safeguard your account and offers protection if it has been compromised. Provided you report the fraud early, you don’t have much to worry about. Credit cards: Paying with your card may be one of the most secure methods. Although your credit card number could be stolen, you aren’t responsible for unauthorized charges, provided you report them fast.