What Is a Traveler’s Check?

What Is a Traveler’s Check?

Let me explain what a traveler’s check is. These checks were once a go-to option for safe purchases during international travel, offering protection against loss or theft. You can use them to buy goods or exchange for cash in various countries. But with credit and debit cards taking over, they've become much less common.

Typically, people on vacation abroad use them. They provide a secure way to carry money without the risks of losing cash. The issuer, often a bank, guarantees replacement if they're lost or stolen. Nowadays, credit cards and prepaid debit cards have mostly taken their place.

Key Takeaways

Traveler's checks are secure because they can be replaced if lost or stolen, which makes them better than carrying lots of cash. They were made for international travelers, but their popularity has dropped thanks to easier options like credit and prepaid cards. You'll face purchase fees, and only a few places like American Express and Visa still offer them. You can cash them, use them for buys, or deposit them, but fewer spots accept them now. Alternatives like prepaid travel cards often give you more convenience and security for trips abroad.

Understanding the Functionality of Traveler's Checks

A traveler’s check is prepaid for a fixed amount and works like cash, so you can use it for purchases or services while traveling. You can also swap it for cash. Big financial institutions issue them, and banks or credit unions sell them, though far fewer do so today.

Like standard checks, they have unique serial numbers. If one goes missing, the issuer can cancel and replace it. They're in fixed denominations and multiple currencies, handy where exchange rates fluctuate, and they never expire. They're not tied to your bank account or credit, with no personal info, so no identity theft risk. They use a dual signature: sign when buying, sign again when cashing to stop unauthorized use. Many banks, hotels, and retailers used to take them like cash, sometimes with fees, but now it's harder to find places that accept them as cards become more popular.

The Evolution of Traveler's Checks

The story starts with James C. Fargo, American Express president, who couldn't cash checks on a Europe trip. In 1891, employee Marcellus F. Berry created a check needing the bearer's signature for overseas money. American Express and Visa still spell it the British way on products.

Where to Purchase Today's Traveler's Checks

You can still get them from Visa and AAA, usually with a fee. AAA now pushes prepaid Visa cards instead. In the U.S., American Express locations sell them, or buy online from their site if you have an account. Visa has them at Citibank and other banks. Companies like American Express, Visa, and AAA still issue them.

How and Where to Cash Traveler's Checks

Deposit them at your bank or cash at hotel lobbies, often free for guests. American Express lets you redeem theirs online for bank deposit.

Modern Alternatives to Traveler's Checks

The clear choice now is a credit or debit card from a bank that works globally with low or no foreign fees for purchases or ATMs. If your bank charges high, go for prepaid travel cards—they're the updated version of traveler’s checks. They let you withdraw local currency from ATMs and buy from merchants, ditching the need for checks altogether.

Prepaid cards aren't linked to your account, so no one can empty it if lost, and you can't rack up debt. Credit cards give similar or better protection, but you might prefer a dedicated travel card to avoid using your main one abroad. This keeps your numbers safer, so less worry about monitoring after the trip. Visa and MasterCard offer prepaid cards for foreign use, available online, via travel agents, or at banks. Look for low ATM fees, local operation tech, emergency cash if lost, and zero liability fraud protection. But prepaid can be pricey, so compare fees with your other cards to see if it fits. For U.S. citizens abroad long-term, keeping U.S. accounts helps, and many are good for foreign transactions.

Where Do You Buy Traveler's Checks?

Buy from Visa or a few other institutions. Visit a location or their website. You might need photo ID for an account.

How Do You Cash Traveler's Checks?

Some hotels, resorts, and currency traders cash them for local money, but fewer do now with cards everywhere.

What Do You Do With Traveler's Checks?

They're a secure way to carry money abroad. Tourism spots often cash them, or deposit in a bank. Easy replacement means less theft risk, but they've lost favor to convenient cards.

The Bottom Line

Traveler's checks are secure for abroad money, easily replaced if lost. Popular historically for fixed amounts and purchases, but now overtaken by cards. Some still issue them, but cashing is harder with electronic payments everywhere. You're often better off with credit or prepaid cards for security and access without fees or physical hassle.