
Traveller's cheques are pre-printed cheques with a designated balance that travellers can use worldwide across a range of currencies. They are purchased before a trip and can be used to make purchases at participating hotels or retail stores, or exchanged for cash in the local currency at banks or check-cashing agencies. Traveller's cheques are insured against theft and loss and can be replaced if stolen, making them a more secure option than carrying cash. However, they may be impractical to use, as they are less widely accepted than credit or debit cards, and there may be fees involved in cashing them in.
Characteristics | Values |
---|---|
Security | Travellers' cheques are safer to carry around than cash as they can be refunded if lost or stolen. |
Expiry | Travellers' cheques do not have an expiry date. |
Convenience | Travellers' cheques can be inconvenient and costly to exchange. |
Acceptance | Travellers' cheques are less widely accepted than card payments. |
Fees | Travellers' cheques often come with handling, commission and cashing-in fees. |
What You'll Learn
Security
Traveller's cheques were once a popular way to carry money while vacationing abroad. They are sold in fixed denominations and can be used for purchases or cashed like an ordinary check. Traveller's cheques can be easily replaced, making them less risky than carrying large amounts of cash.
Traveller's cheques have unique serial numbers, and a dual signature system. You sign them when you purchase them, and then you sign them again when you cash them, which is designed to prevent anyone other than the purchaser from using them. The merchant can verify that the second signature matches the first.
If a traveller's cheque is lost or stolen, it can be replaced by the issuing financial institution. The purchaser would need to have the receipt issued with the purchase of the cheques showing the serial numbers allocated.
Traveller's cheques do not have an expiration date. They are not linked to a customer's bank account or line of credit and do not contain personally identifiable information, therefore eliminating the risk of identity theft.
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Expiry
Traveller's cheques are a medium of exchange that can be used in place of hard currency. They are pre-printed, fixed-amount cheques that allow the person signing it to make an unconditional payment to someone else. Traveller's cheques do not have an expiry date, but they must be used within six months of the date on the cheque. They can be exchanged for local currency and can be used worldwide across a range of currencies.
Traveller's cheques can be purchased from currency exchange offices, banks, and agencies. They are available in several currencies, including US dollars, Canadian dollars, pounds sterling, Japanese yen, Chinese yuan, and euros. They are usually sold in pads of five or ten cheques, with denominations of 20, 50, or 100 (× 100 for yen) of the chosen currency.
When you first order traveller's cheques, you will need to sign each cheque once upon receipt and again when you use it at a retailer. It is important to note the serial numbers of each cheque, which are usually found on the top right corner. If the cheques are lost, you can submit the unique reference numbers to the institution that sold them, and you will be refunded for the exact sum of the money lost.
While traveller's cheques are easily replaceable if lost or stolen, they are becoming less popular due to the number of charges involved, including commission, handling, and cashing-in fees. Additionally, they are less widely accepted nowadays, and it may be impractical to use them as you will need to carry several cheques and fill them out prior to use.
If you have unused traveller's cheques after your trip, you can save them for your next trip as they do not expire. Alternatively, you can request a refund at a Post Office or currency exchange office, although buy-back rates tend to be lower than sell rates.
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Replacement
Traveller's cheques are a safe way to carry money abroad, as they can be replaced if lost or stolen. However, they are becoming less popular due to the inconvenience of having to carry around multiple cheques and the difficulty in finding merchants that accept them.
- Credit Cards: Credit cards are a convenient and safe way to pay while travelling. They provide more secure payments with EMV chips and handle currency conversion for you. Many travel credit cards also offer perks like earning points or receiving welcome offers.
- Debit Cards: Debit cards function similarly to credit cards, but pull funds directly from your bank account. If your debit card has no ATM or foreign transaction fees, it can be a good option for getting cash while abroad.
- Prepaid Travel Cards: Similar to traveller's cheques, you load a prepaid card with a set amount before travelling. Prepaid cards can be used to get local currency, shop, and dine. However, they have a maximum amount, so you'll need to set a budget. If you lose the card, the money is gone.
- Digital Wallets: With the rise of mobile phone use, contactless payments, or tap-to-pay, are becoming increasingly popular. Digital wallets allow for quick and secure payments using your phone or mobile device. However, not all merchants are set up to accept these transactions, especially in remote destinations.
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Acceptance
Traveller's cheques are accepted in various parts of the world, but their acceptance is becoming more limited. They are generally accepted in city locations, but you may find it harder to use them in remote areas.
Retailers do accept traveller's cheques overseas, especially in the United States. However, as they are becoming less common, it is a good idea to confirm that the country you are visiting accepts them. You can do this by calling banks at your destination.
Hotels may allow you to use traveller's cheques to pay for rooms and other services. Some stores or restaurants still accept traveller's cheques as a form of payment.
Companies that issue traveller's cheques, such as American Express, partner with banks and foreign exchange partners around the world. You can visit one of these locations to cash in your traveller's cheques for local currency when travelling abroad.
There are thousands of foreign exchange partners in countries around the world where you can exchange your traveller's cheques for local currency.
If you are unable to find a location to exchange your traveller's cheques, you can redeem them directly with American Express Travel Related Services Company, Inc. online or over the phone.
It is important to note that American Express does not approve the use of its products or any related services in the following territories: Crimea, Donetsk, Luhansk Regions of Ukraine, Cuba, Iran, North Korea, Syria, Russia, and Belarus.
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Cost
The cost of using traveller's cheques can vary depending on where you are cashing or spending them. There are usually fees involved, which you should research in advance.
When purchasing traveller's cheques, there is often a fee to pay. For example, if you buy sterling traveller's cheques for use abroad, you will likely have to pay a commission of around 1%. However, if you buy foreign currency traveller's cheques, such as euros or US dollars, you are unlikely to be charged a commission.
If you are exchanging traveller's cheques for cash, you may be charged a foreign exchange rate and commission on these transactions. Commission charges may vary by country or exchange partner.
If you have unused traveller's cheques that you wish to deposit into your bank account, there may be a fee for this.
It is important to note that traveller's cheques are becoming less common, and as a result, there may be limited locations where you can cash or spend them. This could lead to inconvenience and potentially higher fees.
Before purchasing traveller's cheques, it is recommended to research the fees and conversion rates that will apply.
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Frequently asked questions
Travellers cheques are pre-printed cheques with a designated balance that travellers can use worldwide across a range of currencies. They can be used when you're on holiday in place of cash, or can be exchanged for cash while you're away.
Travellers cheques are a secure option for travellers. They don't have an expiry date and are easily replaceable if lost or stolen. They can also be exchanged for local currency.
Travellers cheques are impractical to use as you'll have to carry a number of them around with you, and they're less widely accepted these days. There are also handling, commission and cashing-in fees.