What is a Money Order?

by | Mar 3, 2017 | Financial Services

What are international money orders, and what are they used for? If you have never had to use one before then, it is easy to understand why you would not be familiar. Money orders are something that most people never need until they do. This is because most situations do not justify the use of one, but when you are buying a home or have to pay anything by mail to the government, then chances are you will need to use a money order.

Like a Check

Money orders are like a check in that they have cash value, but can only be used by the person they are addressed to. When you purchase a money order, you will have the option to include a pay-to field so that you can go ahead and have the recipient added to the money order. If you do not have this option, then you will just make it out to them like you would a check.

How is it Different?

A check is an unsecured promise of funds. A money order is simply a secured promise of funds. When you purchase a money order the company that you purchased it from acts as an escrow and will guarantee that the money is available. Since these companies are endorsed by government agencies, using a money order assures that the money is available, unlike a check.

When Will You Need One?

Most people never need money orders in their day to day lives, but you will need one if you have to pay any government charge by mail. This can include application fees and just about anything else that you have to mail in. You will also need one when you purchase a home. While some real estate agents will accept a personal check, many will require that you use a money order when you are putting your deposit down on your home. In general, money orders can be used in any situation a check can.

If you need to purchase international money orders in Illinois, then check out West Suburban Currency Exchanges, Inc.

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