If you need to carry out certain transactions without having to carry cash around, you will need a money order. In this article, we have put together everything you need to know about money orders and debit cards, including how to identify fraudulent activities.
What is a Money Order?
A money order is simply a paper document akin to a check and is used as payment. That is, it is a safe alternative to cash or personal check. You can buy a money order by giving cash or any acceptable medium to a cashier. And so, people without access to a standard checking account can make use of money orders.
As an acceptable instrument, it can be used to make payments for small debts, both personal and business. There is usually a fee for it. The order will be printed out, then, you fill in your information and send or give it to the person you are having a business transaction with.
How Do Money Orders Work?
At the cashier, you will need to specify who will receive the money order. After that, both you and the issuer must sign it to make it valid and it helps to cut down on theft. To prepay for a money order, you can go to a location such as a U.S. post office, Walmart, or Western Union.
What’s more, the majority of money orders have a maximum limit of $1,000. In the case where you need to purchase multiple orders, you will have to buy more than the stipulated limit. Be mindful to fill out the money order carefully. This is it is a one-off purchase, hence, you need to keep good records of it.
What are the ways to buy a money order?
To buy a money order, you will need to do the following:
1. Put everything you need together: Here, all you need are cash or a debit card, the name of the payee or recipient, and the amount you want to send. Moreover, you can pay with a credit card. On the other hand, it will usually cost extra.
2. Fill out the form: Aside from providing the payee’s name, you will need to attach your name and in some cases, your address. After that, you can sign the money order. Not to forget, you must ensure that every piece of information you provided is accurate because you will not be able to change the information when you are through.
3. Keep the receipt: The receipt is proof of the money order or a paper slip and it comprises the information you provided on the money order.
4. Keep track of your money order: On your receipt, you will find a tracking number that you can use to authenticate that the money order was sent to the proposed payee. In case you encounter any difficulty, get in contact with the place where you bought the money order to enable you to rectify it.
Where Are Money Orders Sold and How Much Does It Cost?
Domestically, the price of money orders varies, depending on the location you purchased them. However, the price range is between less than one dollar and five dollars. At Walmart or a money transfer agent, you will get a better offer. On the other hand, going to the bank may cost you more.
Furthermore, some providers do not offer international money orders. Definitely, you can always get international money orders at some post offices, even though their prices are high. But if you get yours at the military post office, chances are that you will get a discount. In addition, irrespective of the location you buy it; make sure you do so in person.
When Is It Appropriate To Use a Money Order?
In certain situations, using cash or personal checks can put you at risk and they may not be the preferred acceptable medium of payment. Below are some of the examples of situations you can use a money order:
1. If you need to send money securely: Money orders, unlike checks, do not require your bank account number. Also, the money order helps to make sure only your payee can make use of it, unlike mailing cash.
2. If you do not have a checking account: Because a money order does not need you to pay upfront, and you do not need a bank account, it enables you to make a safe payment.
3. If you are worried that your check may be bounced: if you have insufficient funds, money orders cannot be rejected. This is because they are prepaid.
4. If you are sending money abroad: some money orders work only locally, while some work both locally and internationally. However, if you need to send money internationally, you may have to send it using the US Postal Service money orders. Notably, this can be sent to about 25 countries.
Where Is The Best Place To Cash A Money Order?
The best place to cash a money order is at the same location where it was issued to you…it could be a bank branch, post office, or any entity. Away from that, if you have money that you do not need right away, you can consider depositing it in your bank account.
Interestingly, banks in the US accept postal service money orders, just the same way they accept checks at branches, ATMs, or banking apps. In addition, before depositing the money order, do ensure to sign the back.
What Is The Way Forward If Money Order Is lost Or There Is a Mistake Somewhere?
So far as the money order has not been cashed out and you discovered a mistake on it, you can always do it and get a replacement or refund. In the same way, if you lose your money order or you discovered a mistake, you will be required to bring your receipt or the money order, as the case may be, to the point of purchase.
You may have to fill out some paperwork, using the information on your receipt. Additionally, you may be asked to pay a fee. Processing your claim may take up to one month or longer.
In the extreme case, if your money order was already cashed out before the time you discovered the error, you have a slight chance of getting it back. And that is by involving the police.
Is It Possible For One To Track A Money Order?
If you need to track your money order, you may be able to do so far your receipt is available. However, the process of tracking it is not the same with all issuers. In addition, the US Postal Service, MoneyGram, and Western Union permit you to track your money order online using such information as the serial number on the receipt and the amount you purchased it.
Using the receipt, chances are that you will need to file a research request to enable you to find the serial number of your money order. That can be time-consuming and expensive too.
For instance, it costs up to $40 at MoneyGram and may take as long as 60 days to process. What’s more, you must be sure to track it with the right provider, irrespective of the place you bought it.
Are Money Orders Safe?
Yes, they are. Although they are safe, they can also be used fraudulently. And so, to protect yourself from money order fraud, you will need to do the following:
1. Avoid exchanging your money order with strangers: This may not happen if you can pay electronically or through any other safer means.
2. Watch out for red flags: Be on guard against such issues as sending extra money to someone who claims they have made too much payment. You should also watch out for visual cues like missing watermarks or amounts more than $1000.
3. Confirm the fund: If you can’t cash the money order at the place you were issued, you may have to call the issuer’s office, using their phone number in the public domain to find out if the document is legal.
Other Ways to Spot a Fake Money Order
Before you accept a money order, try to confirm its authenticity. You have to look out for several elements to help you identify any fake one and they are:
1. Study the Paper: US Postal Service money orders are watermarked and designed in a specific way to prevent fraud. You will see the watermarks of Ben Franklin on the left side, from top to bottom. Also on the right of the Franklin watermark, you will see a vertical multicolored thread with the letter “USPS” that is weaved in and out of the paper.
2. Check the amount of the dollar: if the dollar amount has a discoloration, it means that it has been tampered with, and that is evidence of fraud. The dollar amount must be imprinted twice.
3. Check for the dollar value: Domestic money orders do not exceed $1000, while international money orders do not exceed $700 ($500 for El Salvador or Guyana).
Read Also: Best Banks for Personal Loans in 2022
How to Cash Domestic Money Orders
There are no expiry dates on domestic money orders, neither do they amass interest. Besides, the precise amount on the money order is what you are entitled to cash. Similarly, you can cash a US Postal Service money order at any Post Office for free. Some banks and individual stores can also help you to cash it.
If you are to cash the money order at the Post Office, you need to note the following information:
1. Ensure not to sign the money order
2. Take a primary photo ID with the money order to any Post Office location
3. Make sure you sign the money order at the counter and in front of a retail associate.
#How to Check the Status of a Money Order
Any time you pay a visit to the Money Order Application, you can always check the status of a money order. In doing so, make sure that you have the right information for the money order you want to check. Such information includes:
1. Serial number
2. Post Office number
3. Dollar amount
When Do You Need a Money Order?
Some situations may warrant you need a money order. That includes:
1. When you need funds. This is a guaranteed way to pay someone
2. If you owe an individual but you do not want to walk around with cash.
3. If you want to write a check but want your bank account details to be kept away from the information you need to provide.
4. When a bill needs to be paid using a check but you do not have a bank account.
In addition, a money order can be used to:
1. Pay anyone who needs assurance of your ability to pay
2. Pay a bill, like rent
3. Pay for a purchase
4. Send a large purchase without letting the information shown on a credit card
5. Send money to someone in a correctional facility
Can You get a Money Order with a Debit Card?
You can use a card or cash to buy money orders at the post office, Walmart, or Western Union. However, it is not always advisable to do so because a debit card can cause you to overdraw your bank account. But if you need to pay online, a debit card is most preferable.
Money order helps you to carry out different transactions without having to reveal your bank details. Hopefully, the above information was enough to convince you of what you can do with money orders.
- www.nerdwallet.com—How Money Orders Work: What You Should Know