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It may be possible to cancel a money order before it’s cashed and seek a refund. A money order is a type of payment that is very secure due to the fact that the payer purchases the money order with cash upfront. That way, the recipients don’t have to worry about the payment not going through like they would with a check that could bounce.

If for whatever reason the payer needs to get the money order refunded, that can be done before the recipient cashes or deposits the money order. Read on for more insight into how to get a money order refund and other important considerations about canceling or returning a money order.

Why You Might Need to Return a Money Order

These are a few common reasons for requesting a refund on a money order.

•   When a money order is lost. If for whatever reason the money order is lost in the mail, it’s wise to act as quickly as possible to ensure the wrong person doesn’t try to cash that money order. Luckily, money order issuers typically have a protocol established in the event that a money order is lost, similar to how a bank can help you if a check written against your checking account gets lost.

They can either cancel the payment, replace the money order, or refund the money order. These services do come with a fee, but it’s usually much smaller than what the loss of the whole money order would be.

•   When a money order is stolen. If a money order is stolen or fraud occurs, the issuer can take steps to cancel, replace, or refund the money order. Again, it’s important to make this request quickly before the thief gets a chance to cash a money order.

•   When the payment is no longer necessary. In some situations, the payer decides they no longer need the goods or service they used the money order to pay for. In this situation, they may want to cancel it and request a refund from the issuer before it’s cashed, instead of trying to get a refund from the payee after they deposit or cash it.

Recommended: Money Order vs. Cashier’s Check: What’s the Difference?

What Do You Need for a Money Order Refund?

If you decide you want to get a refund for a money order you purchased, it can be a wise move to first track the money order and see if it’s been cashed. If it hasn’t, you can then contact the issuer of the money order so they can share what’s required to issue the refund. That being said, most money order issuers require the following things in order to refund a money order.

•   The receipt. The easiest way to start the refund process is to present the money order issuer with the receipt. If you don’t have the receipt, you can likely contact or visit the physical location of where you purchased the money order to talk through their options for moving forward. With most issuers, you can submit a research request form to have the details of the money order confirmed; there’s often a fee for this service.

•   A completed cancellation request form. Next, you usually need to complete and sign a cancellation request form in order to cancel the money order so you can qualify for a refund. Once the money order is canceled, you can request either a refund of the purchase price or a replacement money order.

•   Method of identification. Usually, presenting your ID is necessary in order to cancel a money order.

•   Money to pay cancellation fee. Most money order issuers charge a cancellation fee, and that fee can increase without a receipt present, as described above. Currently, fees can range from just a few dollars to $15 to $20, varying with the provider and the amount of the money order.

Recommended: Where to Cash a Money Order

Process of a Money Order Refund

Here is a step-by-step guide to what to expect when refunding a money order.

Step 1. Find the Receipt

It’s important to hold onto the receipt for a money order in case the payer does end up wanting to return it. It can still be possible to return the money order without a receipt in some cases, but the process may not be as seamless.

Step 2. Submit a Cancellation Form

In order to qualify for a refund, the money order first needs to be canceled. To cancel a money order, you usually need to complete and sign the cancellation form. At this point, you typically need to show your ID, so this probably takes place in person at a money order purchase location. When you submit a cancellation form, you may have the option of requesting a refund.

Step 3. Pay the Cancellation Fee

It’s important to be aware that canceling a money order usually comes with a fee and that fee can increase when someone doesn’t have the original receipt, as noted above.

How Long Does a Money Order Refund Take?

How long it takes to refund a money order depends on the issuer, but this process can take up to 60 days.

How Much Does It Cost for a Money Order Refund?

How much it costs to get a refund for a money order depends on the fee structure charged by the issuer. All issuers set their own fees, and some may charge more if someone doesn’t have a receipt for their money order. That being said, it can cost between about $5 to $30 to get a refund for a money order with a face value of $5 or more.

Recommended: Can You Buy a Money Order With a Credit Card?

The Takeaway

A money order can often be refunded if it has not yet been cashed. You may want to pursue this process if a money order has been lost or stolen or if it was used to pay for goods or services you have not received or are not satisfied with. There are a few steps to the process, and there may be a fee charged, but it’s usually fairly minimal and is likely worth getting the original amount of money back.

FAQ

Can you get a refund for a money order that has been accepted?

Once a money order has been deposited or cashed by the recipient, it is not possible for the issuer to offer a refund. Because of this, it’s vital to be certain that you want to issue a money order before committing to buying one.

How long do money orders last?

One good thing about money orders is they don’t expire, so the payee can wait a while to cash them. That being said, it’s important not to wait too long to cash or deposit a money order. Usually, if a money order hasn’t been cashed after one to three years, a non-refundable service charge is deducted from the principal amount of the money order and may continue to be charged, which can diminish and even deplete the value of the money order.

How can I tell if someone has cashed the money order?

If someone isn’t certain whether the recipient of their money order has cashed it, they can check the status of the money order with the issuer. Usually, this can be done online on the money order issuer’s website. They may need to provide information such as the money order’s serial number and the issued amount in order to confirm whether it was cashed or not.

About the author

Jacqueline DeMarco

Jacqueline DeMarco is a freelance writer who specializes in financial topics. Her first job out of college was in the financial industry, and it was there she gained a passion for helping others understand tricky financial topics. Read full bio.

SoFi Checking and Savings is offered through SoFi Bank, N.A. Member FDIC. The SoFi® Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 12/23/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

Eligible Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network every 31 calendar days.

Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, Wise, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.

See additional details at https://www.sofi.com/legal/banking-rate-sheet.
*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

SOBK1222021

If someone is applying for disability benefits, they may be relieved to learn that, yes, you can have a savings account while on Social Security disability. While there are certain financial factors that can disqualify someone from Social Security eligibility, having a savings account is not one of those factors.

But of course, there are some subtleties to be aware of with any benefits matter, so it’s important to take a closer look. Among the points to learn are the difference between SSDI (Social Security Disability Insurance) and SSI (Supplemental Security Income), who is eligible for Social Security disability benefits, and what the guidelines are for having a savings account while receiving benefits.

What Is Social Security?

There’s a reason the Social Security program is so well known: It has been providing financial support to Americans for many decades. Social Security benefits are designed to help maintain the basic well-being and protection of the American people. These benefits have been around since the 1930’s in response to the economic crisis caused by the Great Depression.

Today, one in five Americans currently receive some form of Social Security benefits — one third of those are disabled, dependents, or survivors of deceased workers. More than 10 million Americans are either disabled workers or their dependents.

💡 Quick Tip: Help your money earn more money! Opening a bank account online often gets you higher-than-average rates.

Can I Get Social Security Disability Insurance or Supplemental Security Income with a Savings Account?

You may be thinking you can’t have that kind of asset if you want to qualify for Social Security Disability funds. However, it is indeed possible to receive Social Security Disability Insurance (SSDI) or supplemental security income if you have a checking or a savings account.

Even better, it doesn’t matter how much money is held in that account. There are other program requirements that must be met to qualify for SSDI, but how much money someone has or doesn’t have in the bank isn’t one of them.

Eligibility for SSDI

In order to be eligible for SSDI benefits, the individual must have worked in a job or jobs that were covered by Social Security and have a current medical condition that meets Social Security’s definition of disability. Generally, this program can benefit those who are unable to work for a year or more due to a disability.

It provides monthly benefits until the individual is able to work again on a regular basis. If someone reaches full retirement age while receiving SSDI benefits, those benefits will automatically convert to retirement benefits maintaining the same amount of financial support.

Eligibility for SSI

If you receive Supplemental Security Income (SSI), however, there is a limit on how much you can have in savings. SSI is a federal support program that receives funding from the type of taxes known as general tax revenue, not Social Security taxes.

This program provides financial support to help recipients cover basic needs such as clothing, shelter, and food. It provides aid to those who are aged (65 or older), blind, and disabled people who have little or no income (or limited resources). To qualify, participants must be a U.S. citizen or national, or qualify as one of certain categories of noncitizens.

What You Have to Tell SS about Your Assets if You Want Benefits

There are certain assets (in this case, they’re known as resources) that must be disclosed in order to qualify for benefits through the SSI program. Typically, to receive benefits, one can’t own more than $2,000 as an individual or $3,000 as a couple in what the SSA deems “countable resources.” However, there aren’t any such limits in place for the SSDI program.

The value of someone’s resources (aka their financial assets) can help determine if they are eligible for Social Security benefits. If a recipient has more resources than allowed by the limit at the beginning of the month (when resources are counted), they won’t receive benefits for that month. They can be eligible again the next month if they use up or sell enough resources to fall below the limit.

Eligible resources can include:

•   Cash

•   Bank accounts (checking account, regular savings account, growth savings account; whatever you have)

•   Stocks, mutual funds, and U.S. savings bonds

•   Land

•   Life insurance

•   Personal property

•   Vehicles

•   Anything that can be changed to cash (and can be used for food and shelter)

•   Deemed resources

The term “deemed resources” refers to the resources of a spouse, parent, parent’s spouse, sponsor of a noncitizen, or sponsor’s spouse of the Social Security benefits applicant.

A certain amount of these deemed resources are subtracted from the overall limit. For example, if a child under 18 lives with only one parent, $2,000 worth of deemed resources won’t count towards the limit. If they live with two parents, that amount rises to $3,000.

Recommended: What are the Different Types of Savings Accounts?

How Much Can I Have in My Savings Account and Receive SSI or SSDI?

For the SSI program, the total resource limit (which includes what’s in a checking account) can not be more than $2,000 for an individual or $3,000 for a couple. Again, there are no asset limits when it comes to the SSDI program. If someone is applying for the SSDI program, they can surpass that $3,000 limit, and it won’t matter as it doesn’t apply to them.

SSA Exceptions and Programs

Not every asset someone owns will count towards the SSI resource limit (remember, there is no such limit for the SSDI program). For the SSI program, there are some exceptions regarding what counts as a resource. The following assets aren’t taken into consideration:

•   The home the applicant lives in and the land they live on

•   One vehicle—regardless of value—if the applicant or a member of their household use it for transportation

•   Household goods and personal effects

•   Life insurance policies (with a combined face value of $1,500 or less)

•   Burial spaces for them or their immediate family

•   Burial funds for them and their spouse (each valued at $1,500 or less)

•   Property they or their spouse use in a trade or business or to do their job

•   If blind or disabled, any money they set aside under a Plan to Achieve Self-Support

•   Up to $100,000 of funds in an Achieving a Better Life Experience account established through a State ABLE program

The Takeaway

When applying for Social Security benefits, having a savings account may or may not impact your eligibility. It depends on which program you are applying for. It is possible to have a savings account while receiving SSDI benefits. It’s also possible to have a savings account while receiving SSI, but there are limits regarding how much the value of the applicant’s assets (including what’s in their savings accounts) can be worth to qualify for support.

If you happen to be in the market for a savings account, take a look at your options.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with eligible direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

FAQ

How much money can I have in a savings account while on Social Security?

Personal assets aren’t taken into account, including savings, when applying for the SSDI program. For SSI, however, countable resources (including savings accounts) are capped at $2,000 for individuals and $3,000 for couples.

Does Social Security look at your bank account?

That depends. If someone is applying for Supplemental Social Security Income (SSI) benefits, their personal assets are taken into consideration when it comes to eligibility. With Social Security Disability Insurance (SSDI), applicant assets aren’t taken into consideration.

What happens if you have more than $2,000 in the bank on SSI?

If you have more than $2,000 in the bank and are on SSI as an individual (more than $3,000 if you are part of a couple), you will not receive benefits for that month. Your finances will be evaluated the following month to see if your assets have fallen and you therefore qualify.

Does Social Security check your bank account every month?

Money in the bank doesn’t affect Social Security disability benefits. However, there is a $2,000 to $3,000 limit (varies by household) for the SSI program.

About the author

Jacqueline DeMarco

Jacqueline DeMarco is a freelance writer who specializes in financial topics. Her first job out of college was in the financial industry, and it was there she gained a passion for helping others understand tricky financial topics. Read full bio.

SoFi Checking and Savings is offered through SoFi Bank, N.A. Member FDIC. The SoFi® Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 12/23/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

Eligible Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network every 31 calendar days.

Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, Wise, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.

See additional details at https://www.sofi.com/legal/banking-rate-sheet.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

This article is not intended to be legal advice. Please consult an attorney for advice.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

SOBK-Q224-1862157-V1

The government generally can’t take money out of your bank account unless you have an unpaid tax bill (and before they go to that extreme, they will send you several notifications and offer you multiple opportunities to pay your outstanding taxes). If you’re late on a debt or child support payment, on the other hand, the government can’t directly tap your bank account. What they can do, however, is permit other parties to remove the funds. Keep reading for more insight into when and how this can happen.

Times When the Government Can Legally Take Money From Your Account

There are certain situations where the government allows money to be removed from a bank account without the account owner’s permission. Let’s look at a few ways this can happen.

Right of Offset

The “right of offset” is a term that refers to the fact that both banks and credit unions are allowed to take money from an account holder’s checking account, savings account, or certificate of deposit in order to pay off a debt on another account held at the same financial institution. While the government isn’t the one directly taking the money out of a bank account, they do legally allow this to happen.

For example, if you have a checking account and a student loan through a single bank and you fail to pay your student loan, the bank has the right to take money from your checking account to pay for missed loan payments. If you have a bank account with a different financial institution, however, the bank looking for your student loan payments cannot withdraw funds from that account.

Financial institutions don’t have to give account holders advanced warning before exercising the right of offset. This is legally allowed as long as they follow all rules surrounding this practice.

Appeasing Both Sides

Taking funds from your account typically only happens in situations such as a student loan being about to go into default when the person holding the loan has money sitting in checking that could cover the debt. To know whether your funds could be tapped in this way, take a look at the fine print. Financial institutions like banks and credit unions usually have language surrounding this right of offset in the agreement that an account holder signs when they open a savings account, checking account, or a certificate of deposit (CD).

Different financial institutions will have different policies as to how they handle their right of offset process. Typically, credit unions have a bit more leeway when it comes to right of offset, while banks need to stick to stricter standards. For instance, it’s usually illegal for a bank to seize money from an account to pay a credit card debt. However, credit unions may be able to do this.

Which Accounts Can Be Tapped

Here’s another reason why it’s really important to pay close attention to this language: Sometimes a bank or credit union has the ability to access the funds in any joint accounts that the main account holder shares with someone else (like a spouse). So if, say, you had a joint checking account at a bank with funds in it, and the bank also held your student loan which was close to default, both you and your spouse could wind up having your money withdrawn to go towards that overdue loan. Luckily, the right of offset isn’t eligible for tax-deferred retirement accounts (such as IRAs), so the money in those accounts can’t be touched.

Garnishment of Wages

Garnishment of wages is another example of when the government permits taking money from someone without their permission. This is a legal procedure that requires an employer to withhold part of a person’s earnings in order to repay a debt such as child support or a loan. Wage garnishment requires a court order.

Fortunately, Title III of the Consumer Credit Protection Act (CCPA) protects the person who needs to repay their debt. It says that an employer can’t discharge an employee for having their wages garnished for a single source of debt. However, employees with earnings subject to garnishment for a second or subsequent debts do not receive this protection.

Personal earnings such as wages, salaries, commissions, bonuses, and retirement income all qualify for wage garnishment, but tips usually don’t.

Does the Government Take Money From Accounts Often?

Having funds removed from a bank account without the account holder’s permission doesn’t happen all that often. When it does, the account holder can generally anticipate that this scenario is going to unfold, with the exception of it being a right of offset situation and they didn’t read their account holder agreement carefully. Garnishment of wages, however, requires a court mandate and won’t catch anyone off guard.

Let’s look at an example of how these situations can occur. If someone has debt and they don’t respond to a debt collector’s suit against them, the judge usually rules against the person who owes money. The judge may rule that the debt collector can garnish their wages, take a lien out on their property, or take money from their bank accounts.

Are Any Funds Exempt?

You may wonder if any kinds of funds are exempt from right of offset and wage garnishment. Let’s take a look at the guidelines in this situation. If the documents you signed when you opened a checking account, savings account, or CD included a right of offset agreement, then you’ve permitted the financial institution to take your money to pay a debt under the terms outlined in the agreement. The agreement is a legal contract, and you’re subject to it as long as you’re an account holder.

In some cases, you might not even learn that your bank or credit union has exercised its right of offset until after the fact. The agreement doesn’t, however, open the door for a financial institution to pull money from your account whenever it wants. For instance, federal law prohibits a federally chartered bank from using the right of offset to pay your overdue credit card bill at another bank. Again, it is used to repay a loan that is overdue at the same financial institution.

State laws might also limit a bank’s or credit union’s right of offset. This is the case in California, where a financial institution can’t push your balance below $1,000 when it pulls money from your account to cover a debt. Some states also prohibit draining government benefits like Social Security or unemployment in a right of offset action.

When thinking about wage garnishment, let’s take a look at what the law says. What kinds of funds can be garnished? Title III applies to all individuals who receive personal earnings and to their employers. Personal earnings include wages, salaries, commissions, bonuses, and income from a pension or retirement program, but does not ordinarily include tips.

Ways to Avoid Government Withdrawals

None of these withdrawals are ideal, and there are steps you can take to avoid them. You can avoid the internal revenue service (IRS) from withdrawing money from your bank account by paying all taxes owed each year.

When it comes to right of offset, it’s possible to avoid having this happening with a little communication. If you’re worried you won’t be able to make a debt payment to your bank or credit union, you may be able to connect with your financial institution to work out a repayment plan. Being upfront won’t make the situation worse and can lead to a potential solution. If you lose your job, you can talk to your bank about how to manage your debt until you find a new job.

The best way to avoid wage garnishment is to make the required payments, such as child support, on time. Again, if you’re struggling to make a payment because of financial hardship, it’s best to communicate that upfront and to make a plan for recovery instead of falling behind on payments.

The Takeaway

So can the government take money out of your bank account? The answer is yes if you fail to pay your taxes. In addition, the government permita an employer or financial institution to do so in certain situations.

If you plan for debt and other required payments properly, chances are that money won’t ever have to be removed from your account without your permission. Even though funds can be unexpectedly withdrawn via right of offset and garnishment of wages, a person usually knows they have debt that’s past due and may not be totally surprised by this turn of events. When falling behind in payments, it’s often a good idea to talk directly with creditors and explain the situation. Your lender may be willing to set up a new repayment plan that allows you to avoid these two scenarios we’ve just explored.

A New Way to Bank With SoFi

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with eligible direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

FAQ

What is it called when the government takes money from your bank account?

When the government seizes money in a bank account to cover unpaid taxes, it’s called a tax levy.

You can also have money removed from your bank account through a process known as “right of offset” or garnishment of wages (which is money taken directly from a paycheck). These processes don’t involve the government directly taking money out of your bank account, but laws allow a financial institution or employer to do so under certain circumstances.

Can the government take money from your checking account?

Through the “right of offset,” banks and credit unions are legally allowed to remove funds from a checking account. They can do this to pay a debt on another account that the consumer has with that same financial institution.

The internal revenue service (IRS) also has the power to seize assets, including bank accounts, when a taxpayer fails to satisfy their tax obligations.

Can a government take your savings?

Through “right of offset,” the government allows banks and credit unions to access the savings of their account holders under certain circumstances. This is allowed when the consumer misses a debt payment owed to that same financial institution.

In addition, the internal revenue service (IRS) has the power to seize assets, including bank accounts, when a taxpayer fails to satisfy their tax obligations.

About the author

Jacqueline DeMarco

Jacqueline DeMarco is a freelance writer who specializes in financial topics. Her first job out of college was in the financial industry, and it was there she gained a passion for helping others understand tricky financial topics. Read full bio.

SOBNK-Q324-055

In general, it is possible to buy a gift card with a credit card. There are some instances where you might not be able to, though; namely at some specific stores that may limit or ban the purchase of gift cards with a credit card due to fraud concerns. However, you can usually go ahead and swipe or tap to get one of these cards, which can be a convenient and useful present.

Read on to learn more about when you can buy a gift card with a credit card and how it works.

What Are Gift Cards?

A gift card looks and functions similarly to a credit card, but instead it is a prepaid debit card. You can purchase one and load it with a certain amount of funds or many come preloaded in different denominations. These can be a convenient way to give a gift to anyone from your nephew to your dog walker.

Some gift cards can be used at just a specific retailer, like an Amazon or Target gift card. Others can be used at a variety of retailers, such as a Visa gift card that’s designed to be spent almost anywhere.

You can buy gift cards in store or online. Gift cards are activated at purchase so they can be used right away without any further steps necessary. Just like there are credit card expiration dates, gift cards can expire if they’re not used within a certain timeframe.

Types of Gift Cards

There are two main types of gift cards that consumers will come across:

•   Retail or store-specific gift cards

•   Generic gift cards.

This is how these two types of gift cards work.

Retail or Store Specific Gift Cards

Retail or store-specific gift cards can only be used at select (if not just one) retailer. So, for instance, if you buy a gift card for a particular restaurant or cafe chain, the funds are only spendable at that restaurant, not anywhere else. This type of gift card is also known as a closed-loop gift card.

Generic Gift Cards

Generic, or open-loop, gift cards can be used at a variety of retailers as long as they accept credit card payments from that specific payment card network. This type of gift card is offered by most major credit card networks, such as American Express, Visa, and MasterCard.

These cards are often reloadable, though there may be a fee to do so. Open-loop gift cards also often charge an activation fee when the card is purchased.

Recommended: When Are Credit Card Payments Due

Can You Buy Gift Cards With a Credit Card?

Generally, it’s possible to buy a gift card with a credit card. Of course, whether you can do so will depend on whether the retailer allows credit card purchases and accepts payment from the consumer’s specific credit card network.

Some retailers may not allow you to buy a gift card with a credit card or they may place limits on purchases. This is because of fraud concerns, as the purchase of gift cards with stolen or counterfeit credit cards is common. These limitations generally apply to store-specific gift cards.

Recommended: What Is a Credit Card Chargeback

Things to Watch Out for When Buying Gift Cards With a Credit Card

Plenty of people buy gift cards with a credit card, especially when buying gift cards online. Even though it’s possible to buy a gift card with a credit card, there are some things worth looking out for when making this kind of purchase.

Can You Get Rewards for Purchasing Gift Cards With a Credit Card?

While some credit card issuers make it possible to earn rewards like cash back and miles when purchasing a gift card, other issuers don’t reward these purchases at all. For example, the Blue Cash Preferred® Card from American Express does not consider gift cards an eligible purchase for rewards. This may be something to keep in mind when applying for a credit card if you plan to purchase gift cards often.

To find out if you’ll earn rewards for buying a gift card with a credit card, check your credit card issuer’s terms for more details on how your credit card works.

Does Making a Gift Card Purchase Count as a Cash Advance?

Buying a gift card with a credit card can potentially cost consumers more than they realize. This is because some credit card issuers may view buying a gift card as taking a cash advance, particularly for open-loop cards.

Why is that a bad thing?

•   Credit card issuers charge interest and fees on cash advances, which is when a credit card allows the cardholder to borrow a set amount of cash as an advance.

•   Plus, interest starts accruing immediately on cash advances, with no grace period offered. Usually, interest only begins accruing if you make only the credit card minimum payment rather than paying off your balance in full.

•   Also note that the APR of a cash advance also can be higher than the purchase APR on a credit card and can add up quickly.

How to Avoid Cash Advances When Buying Gift Cards With Your Credit Card

Most people don’t realize that a gift card purchase with a credit card can count as a cash advance. Before buying a gift card with a credit card, it’s a good idea to double check what a credit card issuer’s policies are surrounding gift card purchases. You may be charged a higher interest rate, which can contribute to credit card debt.

If the card issuer does count the purchase of gift cards as a cash advance, then it can be wise to buy a gift card with cash or another card whenever possible. And if you do end up needing to buy a gift card with that credit card when you’re in a bind, know this: Your credit card’s cash advance limit may be different than your average credit card limit.

The Takeaway

It is often possible to buy gift cards with a credit card, and you may even earn rewards for doing so. However, it’s a good idea to learn the details before you buy as you might be charged as if you are accessing a cash advance. That can mean a higher APR assessed, and you may have a different limit, too. These are important points to know to make sure you are using your credit card responsibly.

Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.

FAQ

Do credit card providers issue rewards for gift card purchases?

It’s possible with some credit cards to earn rewards points when purchasing a gift card. However, many credit card issuers don’t consider gift card purchases eligible for earning rewards (they deem them cash equivalents and ineligible). Double check the cardholder agreement for a specific card for details.

How can you avoid gift card scams?

Only buy gift cards from trusted retailers to help protect against gift cards scams. Avoid purchasing gift cards from online auction sites that offer discounts, as the gift cards they sell may be stolen or fake. It’s also a good idea to check for protective stickers on a gift card before buying it and to confirm that the gift card’s pin number isn’t showing. If you do spot an issue, get a different gift card.

Can you put money on a gift card with a credit card?

Yes, it is possible to add money to a gift card by using a credit card. It’s up to consumers to choose how much they want to add to a gift card. Retailers can offer gift cards that come in pre-set amounts like $50 or $100, or they may allow customers to add a custom amount to their gift card.

About the author

Jacqueline DeMarco

Jacqueline DeMarco is a freelance writer who specializes in financial topics. Her first job out of college was in the financial industry, and it was there she gained a passion for helping others understand tricky financial topics. Read full bio.

Photo credit: iStock/Tingting Ji
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A quinceañera, the celebration of a girl’s 15th birthday, is a rite of passage that many young women and their families look forward to for years. These parties can be lavish and, therefore, expensive to host, so understandably many parents tend to budget for them far in advance.

If you’re planning one, whether it’s coming right up or years away, it’s typical to wonder: How much does a quinceañera cost? How can I make it affordable? How do I budget for a quinceañera? Read on for answers.

What Is a Quinceañera?

A quinceañera is a unique type of party that celebrates a girl’s 15th birthday in certain Latin American cultures. The term “quinceañera” translates to “the girl who is 15,” but it represents something much larger than that. A quinceañera signifies when a young girl becomes a woman who is mature, capable, and independent. This event also serves as a symbolic gesture that reaffirms her religious beliefs and commitment to the church.

Usually, a quinceañera involves hosting a religious ceremony and then following that ceremony with a party. When it comes to planning a quinceañera, many people take it as seriously as a wedding, and the expense can be similar to how much a wedding costs.

Average Cost of a Quinceañera

The cost of a quinceañera can vary greatly depending on where the party takes place, how many people are invited, and what kind of event is hosted.

In terms of ballpark figures, how much a quinceañera costs usually ranges from $5,000 to $20,000. To sock away that much cash, it’s a good idea to start putting aside some money every month in a high-yield savings account, starting well ahead of the event.

Common Expenses for a Quinceañera

To set and stick to a budget, it can be wise to look at the different components of a quinceañera. How much this party costs will depend on what is spent on things like food, decorations, and clothing. When creating a budget for a quinceañera, it can be helpful to plan for the usual expenses and to determine where it’s a good idea to splurge and where to save.

What follows is a quinceañera budget list with some of the key expenses to keep in mind.

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Venue

Similar to hosting a wedding, the venue can be one of the more expensive aspects of throwing a quinceañera. It typically accounts for at least 10% of one’s budget but can go much higher. The more people invited, the larger the event space will need to be, and the more this cost can rise. Also consider whether the location you are interested in comes with tables and chairs or whether you will also need to rent those, adding to the price tag.

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Food

How much food is required and the type of food and service style can affect the cost of food for a quinceañera. Whatever the case, this is typically among the big-ticket items in a budget, often accounting for 35% of the total expense.

Having a buffet where guests serve themselves tends to cost less than hiring servers to bring the food to each individual table. Choosing to serve late-night snacks and to have an open bar for the adults can also affect the price of food.

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Attire

The birthday girl normally wears a dress similar to a wedding dress, which can be costly, and close family members may also require formalwear for the event. This typically is a celebration that involves some serious wardrobe shopping that can easily cost around 10% of the total budget.

Photo and Video

Many families choose to hire a professional photographer, videographer, or both to capture special moments from the event. If you are among their ranks, then you need to include that expense in your party planning and plan how you want to stick to that budget. This can take about 12% of your total funds for the celebration.

Entertainment

Some parents will want to hire a DJ, live band, or other form of entertainment for the quinceañera. Mariachi bands and photo booths are other popular features of these celebrations.

Decorations

Decorations are a good example of a quinceañera expense that can vary greatly depending on how much someone wants to spend on flowers, linens, flatware, and other decorations.

Recommended: 20 Ways to Celebrate the Holidays Affordably

Party Planner

Because planning a quinceañera can be a lot of work, some families may choose to hire a party planner to help them out. This person will typically have an extensive network of resources and can take the time and stress of planning off the hands of the parents.

Tips for Budgeting for a Quinceañera

After crunching the numbers on the expenses mentioned above, some families may find they need to scale back on their plans. Saving money is important, and no one should be saddled with major debt for a celebration. Let’s look at a few ways to make planning a quinceañera on a budget easier.

Planning the Date in Advance

The closer it gets to the event date, the more venues and other vendors are likely to charge. Planning the event far in advance can make it easier to select less expensive dates for the party and to have a top pick of vendors. The less expensive vendors may book up faster than the pricier ones.

Renting Attire

The clothes for this big celebration are likely to be worn only once. Why pay a steep price and then have them gathering dust? Renting formal dresses, shoes, tuxedos, or suits instead of buying them can help lower the cost of clothing for the event.

Finding a Reasonable Venue

Another reason it helps to plan the event far in advance is because it gives parents and their daughter time to look for different venus. Community centers, churches, or a family home may all present affordable options for a quinceañera.

DIY Decorations

It’s time to get crafty. Instead of buying expensive decorations, have some fun by planning some DIY projects and save some cash at the same time. Arranging your own store-bought flowers, for instance, can save a bundle.

Recommended: 9 Cheap Birthday Party Ideas

Limiting the Number of Guests

As tempting as it can be to invite tons of family and friends to such an important event, the more people invited to a quinceañera, the more the party will cost. Limiting the guest list to just nearest and dearest friends and family can make it easier to find a smaller and more affordable venue. It can also mean that you will spend less on food, drinks, and decor.

Sending E-invites

Paper invites and stamps add up surprisingly fast, especially when you have a long guest list. Consider keeping things low-cost and environmentally friendly by sending out e-invites instead. This is a quick way to cut a major cost from a quinceañera budget.

Tapping a Talented Friend for Videos and Photos

As noted briefly earlier, hiring a professional photographer or videographer can be expensive. Asking a friend or family member who enjoys photography or videography to capture the event can help cut down on this expense or even make it free.

Recommended: 15 Creative Ways to Save Money

Banking With SoFi

Working towards a big financial goal like hosting a quinceañera? SoFi can help. When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards. Qualifying accounts can even access their paycheck up to two days early.

FAQ

How much does a typical quinceañera dress cost?

While quinceañera dresses tend to cost around $200 to $300, they can be much more expensive. Renting a dress or buying a used one can help save money here. Don’t forget to budget for alterations and accessories like shoes and jewelry.

Who traditionally pays for a quinceañera?

The parents of the birthday girl are the ones who usually pay for a quinceañera. That’s why it’s important they have a quinceañera budget so they can save accordingly.

How long should you plan for a quinceañera in advance?

It can be helpful to plan for a quinceañera at least a year in advance, especially if the parents hosting the event need to save money for it. Depending on the scale of the event, parents may want to start saving even sooner. Parents can create a quinceañera cost breakdown so they know what to save for and where to cut back.

About the author

Jacqueline DeMarco

Jacqueline DeMarco is a freelance writer who specializes in financial topics. Her first job out of college was in the financial industry, and it was there she gained a passion for helping others understand tricky financial topics. Read full bio.

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