Traveler's Checks: Are They Still Relevant Today?

Traveler's checks are paper documents that can be used as a traditional check or cash. They are typically used by people traveling to foreign countries and can be purchased for set amounts. They can be used to buy goods or services or be exchanged for cash. Traveler's checks have become less popular due to the increasing use of credit and debit cards. However, they still have their advantages, such as being replaceable if lost or stolen and having no expiration date. On the other hand, they may be hard to obtain, have limited acceptance, and incur fees. So, are traveler's checks still a good idea? Let's find out.

When you don't have a credit or debit card

Traveller's cheques are a secure way of carrying money while abroad, and they can be easily replaced if lost or stolen. However, they have fallen out of favour due to the increased convenience of credit and debit cards. If you don't have a credit or debit card, here are some alternatives to traveller's cheques:

Debit Cards

A debit card can be just as easy to carry around as a credit card and offers similar fraud protection. You can use a debit card to make purchases or withdraw local currency from an ATM when you reach your destination. However, your bank may charge foreign transaction and ATM fees. To avoid this, consider opening a bank account that waives foreign ATM fees.

PayPal

PayPal is a money transfer company where you can link your bank account and make online purchases. You can use PayPal to securely pay for flights, hotels, and car rentals without entering your debit card details.

Cash

Although you can't use cash to purchase a plane ticket online, many airlines will allow you to pay for tickets in cash at certain airports.

Gift Cards

You can purchase gift cards for specific airlines, hotels, or Airbnb with cash or debit and then use them to pay for your flight, hotel, or rental booking.

Prepaid Cards

Prepaid cards are not linked to your bank account, which prevents anyone from draining your account if the card is lost or stolen. You can add money to a prepaid card before using it, and they often offer fraud protection. However, they can be expensive, so be sure to compare fees.

Mobile Wallets

A mobile wallet is a digital version of your physical wallet, allowing you to store credit cards, debit cards, prepaid cards, boarding passes, hotel reservations, and more. They use advanced technology to prevent your actual account numbers from being stored in the wallet.

Traveller's Cheques

If you are unable or unwilling to use the above options, traveller's cheques are still available from select companies, such as Visa and AAA. They are easy to carry and can be replaced if lost or stolen. However, they may be harder to find and cash, and you will likely incur fees.

When you want to avoid certain fees and expenses

Traveller's cheques are a good option when you want to avoid certain fees and expenses. If your credit or debit card charges a foreign transaction fee, you can be charged a fee every time you make a purchase with your card in a foreign country. If your card also charges ATM fees, these fees can add up quickly.

To avoid these fees, it might make sense to use traveller's cheques. Although there may be a fee involved when you purchase or cash a traveller's cheque, it might still be less than other fees your credit or debit card may charge. A typical foreign transaction fee amount is 3% of each purchase you make.

In addition, if you have difficulty getting approved for a credit card, a prepaid card could be a good alternative. You simply load the card with money from your bank account and use it as a debit card at an ATM or as a credit card at merchants and hotels.

When you need an extra safety measure

Traveler's checks are a good idea when you need an extra safety measure. They are a secure way of carrying money while abroad. They are protected by a dual signature system, requiring the holder to sign when purchasing and again when spending, thus preventing anyone other than the purchaser from using them. They also have unique serial numbers, so they can be replaced if lost or stolen. Traveler's checks are not linked to a customer's bank account or line of credit and do not contain personally identifiable information, so there is no risk of identity theft.

However, traveler's checks are becoming less common and harder to find, with some major banks no longer offering them. They may also be inconvenient, as they need to be cashed at a bank or hotel during business hours. There may also be fees involved when purchasing and exchanging traveler's checks.

When you want to avoid bad exchange rates

However, it is important to note that traveller's cheques may not be widely accepted anymore. In much of Europe and Asia, they are no longer accepted and cannot be easily cashed, even at the issuing banks. As such, you may need to hunt down a bank branch or hotel that accepts them during business hours.

Additionally, traveller's cheques often come with fees. There may be a fee for purchasing the cheques, and another fee for exchanging them for local currency. These fees can add up and may end up being more expensive than using an ATM or credit card abroad.

If you do decide to use traveller's cheques, be sure to purchase them from a reputable company, such as American Express or Visa. Keep the receipts and record the serial numbers in case the cheques are lost or stolen. Also, be sure to notify your bank and credit card company of your travel plans to avoid any issues with unusual activity.

When you want to avoid carrying large amounts of cash

Traveller's cheques are a good option when you want to avoid carrying large amounts of cash. They are a secure way of carrying money while abroad. Traveller's cheques are paper documents that can be used as a traditional paper cheque or like cash. They are intended to aid tourists and are typically used by people on vacation in foreign countries. They can be purchased for set amounts and can be used to buy goods or services or be exchanged for cash.

Traveller's cheques have unique serial numbers and can be easily replaced if lost or stolen, making them a safeguard in countries with fluctuating exchange rates. They do not have an expiration date and are not linked to a customer's bank account or line of credit, eliminating the risk of identity theft.

When you purchase traveller's cheques, you will be asked to sign each cheque. When you use the cheque to make a purchase, you will sign it again in front of the merchant. This dual signature method provides extra security and ensures that only the purchaser can use the cheque.

However, it is important to note that traveller's cheques may be harder to find and cash than in the past. Some banks and companies no longer offer them, and there may be fees involved in purchasing and cashing them. Additionally, they may not be accepted everywhere, so it is important to research their acceptance in your destination before purchasing them.

As an alternative to traveller's cheques, you can consider using a credit card, debit card, prepaid card, or mobile wallet. These options may offer more convenience and flexibility when travelling.

Frequently asked questions