What’s your preferred method of payment?
For many people, the answer to that question has changed. Traditional payment methods have fallen by the wayside with the innovation of things like PayPal and Venmo.
These innovations are convenient. But there’s still something great about paying the good old-fashioned way. Checks and money orders are still important financial tools. But you need to understand them before you sign on the dotted line.
Should you use a check or a money order and what is the difference? Learn about both and money order tracking to see which one is right for you. Read on to learn more.
What is a Check?
A check is a document used to take funds from a checking account. You can write a check to people or businesses in order to make a payment. The check recipient can then add the funds to their checking or savings accounts.
Checks were once the dominant force in U.S. transactions. In 2000, there were more than 40 billion check transactions. By 2012, that number had fallen to less than 20 billion.
Checks may be less popular, but they are still a convenient way to make payments. That’s because you can write a check for any amount that does not exceed the numbers in your checking account.
Cashing checks is also easy. It requires an endorsement, debit card, and identification.
What is a Money Order and Money Order Tracking?
A money order is similar to a check in that it is a fast and safe way to make payments. The difference is you pay for money orders when they are distributed.
You can buy a money order through a bank, credit union or other institution (like a post office). You place the money order for a set amount. You can purchase it with cash or from a checking account.
Money orders are a great option if you have to make a payment but don’t want to carry large sums of money. If you happen to lose the money order, you can place a hold on it.
Unlike checks, money orders are usually capped at $1,000. They also involve a small fee.
Fees vary based on the institution. Retail locations are typically the cheapest place to buy a money order.
Checks are easy to track because of their ties to bank accounts. Since money orders are prepaid, it’s more difficult to see when people cash them.
Most institutions provide tracking numbers with money orders. You can call a toll-free number to see when someone cashes your money order.
The post office, on the other hand, has a different system for money order tracking. You have to submit a form and pay a fee for tracking. They will notify you when someone cashes the money order.
Your Financial Choices
Checks and money orders both have financial advantages.
They are safe and reliable ways to make payments. Ultimately, it’s your choice of what type of payment you prefer.
Are you interested in learning more about finances? We can help. Check out the rest of our blog for tips and tricks related to money.