Those looking for the best combination of "safe" and "affordable" when looking to make a payment may consider using a money order. Money orders don't require a bank account, offer protection to the person making the payment, and are quite simple to fill out as long as you know the steps.
There are different places you can get a money order and different things to know about each one.
How to Fill Out a Money Order
Here are the steps to properly filling out your money order:
Step 1. Write the name of the recipient
The first line you'll likely see will either say "Pay to" or "Pay to the order of." Either way, this line is for writing in the name of the party you are sending money to. Whether it is a person or a business you're writing in here, make sure it is correct and spelled accurately.
Step 2. Enter your address
Often, this section will simply say "Purchaser's Address." The purchaser is you. Write in your address, and while your name is not always required as long as the correct address is written in, it could prove helpful.
Step 3. Add additional information and reason for sending it
While some money orders just ask for the purchaser's address, others will have a "From" section for you to write your name in above the address. Some money orders have an "Account Number" section for if you're paying a bill. This could also go on a "Memo" section on the bottom, as could other relevant information indicating the purpose of the money order should it have a memo section.
Step 4. Sign the front of the money order
Just where it indicates, you need to sign it on the front. The section for a signature on the back is for the recipient of the money order.
Step 5. Tear off and keep the receipt
The receipt is attached to the money order, detach it and store it in a safe place where it won't get lost. With the receipt, you'll be able to track the money order. If the recipient received it and deposited or cashed the money, you can verify it. If it gets lost along the way and someone else tries to cash it, you can use it to get a refund.
How to Fill Out a Western Union Money Order
One particularly common provider of money orders is Western Union. The Western Union website lets you search for locations near you with a filter for ones where you can purchase money orders. Western Union money order fees can vary by location and amount.
The Western Union money order is simple. Write who you pay to the order of, enter your full name and address, account number if necessary, and then just sign it and take your receipt.
How to Fill Out a MoneyGram Money Order
Looking for a money order at WalMart? Many of them have MoneyGram locations within them that allow you to purchase a money order. So do certain CVS locations, and various other establishments you can find on MoneyGram's location finder.
MoneyGram's money order is even simpler to fill out: fill in, from top to bottom, who you're paying the order to, your signature, and your address. Take the receipt off, and your MoneyGram order is good to go.
How to Fill Out a Post Office Money Order
If your local Post Office is closer to you than any bank, Western Union, or convenience store, you're in luck. The Post Office sells money orders, and allows you to send them internationally. International money orders, per the Post Office, cost $8.55 and the maximum dollar amount you can send is $700 - except in El Salvador and Guyana, where it's just $500.
The USPS money order includes a second address field for you to put the recipient's address in, as well as a memo line at the bottom to indicate what the money order is for.
What Is a Money Order?
A money order is a printed payment document for the payer to essentially guarantee the funds they are paying. Because the payer has already paid the money order lender upfront to acquire it, the recipient of the money order is being given a prepaid document. The money is already there.
Money orders can be found at several types of locations. Your local bank, credit union, or grocery store may sell them, and you can also find them at any U.S. Post Office and come pharmacies. In most cases, the maximum amount on a single money order is $1,000, meaning if you're looking to pay a larger sum than that, you will need to make multiple payments with multiple money orders.
Money orders also cost a fee that varies depending on where you go. A U.S. Postal Service money order, for example, costs $1.20 if it is between $0.01-$500.00 and $1.65 if it is between $500.01-$1,000.00. Banks, on the other hand, may charge closer to $5.00.
What's the Difference Between a Money Order and a Check?
There are some similarities between a money order and a check - both can easily be deposited into the recipient's bank account, and both cost a fee from whatever institution you're purchasing them (though cashier's and personal checks generally cost more).
But a money order is different from cashier's checks and personal checks in several ways. Cashier's checks can be issued for far more money than a money order, making them better for larger purchases or bills. Cashier's and personal checks, issued specifically by banks and credit unions, can either be found at those establishments or ordered online - meaning that unlike with money orders, you will need a bank account to acquire these. Money orders do not necessitate a bank account if money is paid upfront with cash.
Because cashier's checks are issued strictly by financial institutions, they are also easier to track than a money order.
Money Order Pros and Cons
Why use a money order? If you don't have a bank account or don't wish to use yours to send money, it's not required to send a money order. Money orders can be purchased with cash, a debit card, or a credit card, and your bank doesn't have to be involved at all in the transfer of the money order.
Money orders allow you to make purchases from sellers that don't accept checks, and allows you to keep information like bank account numbers secret throughout the process. All that matters is the information on the money order.
As with wire transfers, though, money orders can be dangerous and run the risk of fraud and scams. Be extremely careful if you have received a money order. What's the amount of money on the order? Does any of the information look as if it was written over previously written and erased information? Verify the order if you feel you need to. The U.S. Postal Service has a verification phone number for their money orders at 1-866-459-7822. Western Union's customer support number is 1-800-999-9660, while MoneyGram's is 1-800-MoneyGram.
They can also be inconvenient if you need to pay funds above the maximum amount of money allowed for a money order. And while a receipt can help you track it, it's still less convenient than the ease of tracking a transfer from your bank. You'll have to decide for yourself whether these are risks you're willing to take to use a money order.