When a financial institution – such as a bank or credit union – issues a cashier's check, they certify it, or guarantee its payment. Unlike a normal check, the bank can't refuse to pay the cashier's check. That's why they require cash upfront and charge a fee for the service. Money orders are similar. They must be paid for in cash before the money order is issued. Some merchants take debit cards, but the only way to use a credit card is by getting a cash advance, and using the cash to make the payment.
The only way to use a credit card to purchase a money order or cashier's check is to take out a cash advance. The cash can then be used to buy the money order or cashier's check.
Defining Money Orders
A money order is a form of payment that is similar to a check, but because it’s paid for in advance, you can use it like cash, as there's no chance it will "bounce" like a bad check could. Different types of businesses sell money orders, including banks, the post offices, gas stations, convenience stores or retail stores. Fees vary based on the amount of the money order and the issuer, but usually range from a few cents to around five dollars.
Defining Cashier's Checks
Only financial institutions can issue cashier’s checks, which are similar to money orders. The bank takes a cash payment or withdrawal from your account when the check is issued and guarantees its payment. The checks usually cost more than money orders – around $5 to $10. For example, Bank of America and Wells Fargo generally each charge around $10 for cashier's checks. If you bank with the institution, it may provide it for free or at a discount. Also, the bank will issue cashier's checks for much larger amounts than the $1,000 cap for money orders.
Buying With a Credit Card
Before you can buy a money order or cashier’s check with a credit card, you’ll have to get a cash advance. Typically, the amount for a cash advance is the same as the available credit on the card, but you'll pay an upfront fee, and possibly a higher interest rate. In addition, you don’t get an interest-free grace period as you do with regular purchases. You can get cash advances at any bank or through some ATMs, but it's best to go to your bank or the one that issued the credit card.
Deciding Which Method To Use
Which payment method – money order or cashier's check – is best? It all depends on why you need it. Money orders work best If you mail payments under $1,000 or buy something from a private individual, and don't want the person to have access to your banking information. Cashier's checks provide a higher level of security and are normally used for amounts that exceed $1,000. If you accept these forms of payment, you should still examine them closely, as forgeries can occur, just like with regular checks.
- GoBankingRates.com: Money Order Vs. Cashier’s Check — Here's the Difference
- My Bank Tracker: Frequently Asked Questions About Cashier’s Checks
- MyBankTracker: Cashier's Check Fee Comparison at Top 10 U.S. Banks
- CreditCards: 10 Things You Can't Easily Buy With Credit Cards
- Bank of America: Account Information & Access FAQs
- Wells Fargo: Wells Fargo Consumer and Business Account Fees
- Capital One. "What's a Cashier's Check and How Do You Use It?" Accessed March 27, 2020.
- Capital One. "How Do I Order a Cashier’s Check?" Accessed March 27, 2020.
- Washington State Department of Financial Institutions. "Cashier’s Check Scams." Accessed March 27, 2020.
- Citizens Bank. "What Is a Cashier’s Check?" Accessed March 27, 2020.
- Western Union. "How Do I Request a Money Order Refund?" Accessed March 27, 2020.
- HelpWithMyBank.gov. "Answers About Cashier's Checks." Accessed March 27, 2020.
- HelpWithMyBank.gov. "Answers About Funds Availability." Accessed March 27, 2020.
- Federal Deposit Insurance Corporation. "Expedited Funds Availability Act," Page 3. Accessed March 27, 2020.
- Consumer Financial Protection Bureau (CFPB). "I Deposited a USPS Money Order, Cashier's Check, Certified Check, or Teller's Check. When Can I Access This Money?" Accessed March 27, 2020.
- Citizens Bank. "What Is a Money Order?" Accessed March 27, 2020.
Chris Brantley began writing professionally for a financial analysis firm in 1997. From 2000 to 2004, he worked as a financial advisor, specializing in retirement planning and earned his Series 7, Series 66 and insurance licenses. Brantley started his full-time writing career in 2012 and has written for a variety of financial websites, including insurance, real estate, loan and investment sites. He holds a Bachelor of Arts in English from the University of Georgia.