An even larger number of households – 24.2 million, are considered under– banked. The FDIC refers to these households as un-banked. How do you pay important bills when you don’t have a bank account? According to the FDIC 8.4 million households have no bank relationship. Unlike cash, if a money order is lost or stolen, it can be cancelled and replaced.
Traceability – When you buy a money order you’re given a receipt with all the pertinent information on it to trace it if it is lost before it is cashed out. Also, you want a receipt as proof of purchase. Safety – If you don’t have a checking account yet but want to pay for a larger purchase, what can you do? You don’t want to carry around a lot of cash, that can be a bad idea. It is very difficult to alter this information, making it equally difficult to steal your money. The name of the recipient is listed on the face of a money order. Theft Protection – Money orders are a safe way to send funds to your friends or family through the mail. To get a money order issued, cash is paid in advance or the money is taken directly out of your bank account. It is also backed by a 3rd party issuer like Western Union or MoneyGram. A money order is issued with NO bank information on it. Guaranteed Funds – Since money orders are prepaid, the recipient does not have to worry about a bounced check. How can you make sure the payment is made, without sharing personal details like bank location, account number and such? Checks include that kind of information, money orders don’t. So, you don’t want to share your personal information. Imagine paying a person or company you don’t entirely trust. Privacy – Anyone can get a money order and no bank account is required. Here are some additional reasons to consider: Advantages of a Money Order The buyer doesn’t have to withdraw a large amount of cash, and the seller can avoid the risk of payment by accepting a personal check. For example, this makes for a great way to issue or collect payment on a used vehicle. This can be important and is a key advantage over using cash. One of the attractive features is that it gives you a receipt to show that you paid. Or, you might want to pay someone, but you don’t have a checking account. But, you might choose a money order for privacy, because you don’t want to use a personal check. You can use it to pay an individual person or to pay a company, just like a check. There are a number of different reasons you might want to purchase a money order. Checks are issued first, but the funds are not deducted from your account until the check is cashed by the recipient. That payment can be made in cash, by debit card, traveler’s checks, or another form of guaranteed funds. They will only be issued after the buyer pays for the money order – in advance. Money orders are prepaid financial instruments. It is also used for making payments, but there are some key differences between the two methods. What is a Money OrderĪ money order is a financial document similar to a check. There are certain times when a money order can be the preferred method of payment. If you’ve never used a money order, and you can’t even think of why you ever should, it’s an option you may want to explore. Most are unaware of the fact that they’re still commonly used by millions of people. Money orders have become an almost forgotten payment method. 
It is difficult to compete with the lightning speed of electronic payments via online banking, credit and debit cards. Actually, it is a pretty efficient system and is much better than cash – particularly if you want proof of payment, If it becomes lost, the tracking number helps you to cancel to old Order, and issue a new one instead.
The institution then gives you a receipt with a tracking number that follows the document until it is all settled and cashed out. You write in the name of the recipient, as well as your name. When you buy one from an institution, you even fill it out like you do a check. Money orders are similar to personal checks, only a lot less risky – to you and the person you want to pay. You can give it to a person or business as a form of payment. You pay money to a business upfront, and they provide you with a document, guaranteed for a specific amount of money. Think of money order as a check, only better. More importantly, it will help you make a smart, informed choice about where to buy money orders – and help you spend less. Now, you might be thinking to yourself – why would anyone want to use a money order, can I even get a money order near me? Below, your questions will be answered. There are instances and circumstances where they can be the best option to pay someone. But, the lowly money order has a lot going for it – even if it seems primitive and stone age in today’s fast pace. Checks, bank transfers and credit cards are by far the most common ways to pay bills.
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