Why is it you cannot pay for a money order with a credit card????

Question

for example i went to purchase something yesterday and planned to put it all on my credit card but the place required it to be payed with a money order , but the fees to process it could be payed with credit card..........so when i whipped out the cc they told me i had to pay for the money orders with cash????????????????? y isnt a credit card the same as cash???

Answer 1

As they said above but also consider this.

A credit card company charges the merchant a fee of 1.5 to 3% of the purchase. so not only are they giving you a form of cash, they would be losing a percentages to the fees. So if you got a $100 money order it would cost the merchant $100 plus almost 3% for the credit card fee. So your $100 would cost them $103 in payments to the CC company then their overhead to process your money order. Now paying the fee with a credit card to process the money order is not direct cash out of their pocket it is labor and over head, where they have a little wiggle room and the 1.5 to 3% fee makes little difference.

Answer 2

You kind of answered your own question .... No, a credit card is NOT the same as cash. It is an unsecured debt mechanism and there is no way for the company issuing the money order to guarantee they'll get payment or that you're not over your limit etc.

A money order on the other hand is viewed as cash with nearly the same power ... once they issue you the money order they literally no longer have the money in their hands and if the credit card company declines to pay the merchant for whatever reason they are out the money.

That is the same reason that you can't buy lottery tickets with a credit card.

Good Luck.

Answer 3

No, a credit card is not the same as cash. A money order is synonymous with cash and in some instances safer than cash to use. Anything charged to a credit card has not yet been paid for, it is a debt until it is paid.