Traveler’s Checks When Traveling Abroad — Useful or Outdated?

When traveling abroad, you might wonder how to pay for things once you arrive. Should you bring currency on your trip? Which currency should you bring? Can you get money once you arrive? How much cash should you carry at once?

Many of these questions can be answered by using traveler’s checks. Traveler’s checks might seem like an outdated choice, but they can still be useful in certain situations.

In this article, we’ll explain what traveler’s checks are, how they work, and when they might be worth the hassle. We’ll also explore other more common alternatives and give tips for obtaining foreign currency.

What Are Traveler’s Checks?

Traveler’s checks are documents that can be used like standard paper checks and cash. Travelers purchase them before they leave home to exchange for cash in the local currency when they arrive at their destination.

These checks are printed in varying denominations, and each check is uniquely numbered so that it can be replaced quickly if lost or stolen.

Banks, hotels, and merchants were once very used to accepting traveler’s checks. These places liked traveler’s checks because of the safeguards that were put in place. Basically, as long as the original signature matched the signature made at the time of the purchase, payment is guaranteed — eliminating any “bounced checks.”

Now, with the increased use of credit and debit cards (especially those with no foreign transaction fees), prepaid cards, and ATMs on every corner, traveler’s checks have become less popular.

You may find it difficult to find banks or hotels that accept them, and if you do, you might be at the mercy of their business hours to cash them in.

How To Buy and Use Traveler’s Checks

You can still buy and use traveler’s checks in the U.S. and other countries.

Where To Buy Traveler’s Checks

You can find traveler’s checks offered by companies like American Express and Visa. You can also go to your local AAA office to purchase them.

The best place to purchase traveler’s checks is from your own bank, but unfortunately, many banks no longer offer traveler’s checks, including Chase, Wells Fargo, and Bank of America.

If you’re not sure if your bank offers traveler’s checks, it’s worth contacting them to confirm. If you are a customer, banks typically waive any fees to obtain them and this can add up because other companies can add on a 1% to 3% fee on top of the base currency amount that you request.

In order to obtain a traveler’s check, you will need to:

1. Either go in person to an eligible bank or visit the website of the traveler’s check issuer.
2. Select the total amount of currency to purchase.
3. Submit payment, including any fees.

How To Use Traveler’s Checks

Once you have the traveler’s checks, you need to know how to use them. Traveler’s checks work a bit differently than other forms of currency. Here are the steps you’ll need to take:

1. Sign the checks immediately. Follow the issuer’s instructions to find out where to sign (and only sign once).
2. Leave evidence of your traveler’s check purchase somewhere safe. If checks get lost or stolen, you’ll need to provide proof of purchase along with check numbers to get a refund. Leave those details with a friend or save them online for easy remote access.
3. Complete the payee and date fields. Once you have confirmed that the payee or bank will accept traveler’s checks, fill out the payee and date fields.
4. Sign the check again. You must complete this portion in-person to ensure that the signature matches the original. You may also need to show some sort of identification as well. This is key to keeping traveler’s checks secure.
5. If checks get lost or stolen, contact the issuer immediately. You may be able to get replacement checks locally, and the issuer needs to know which checks to cancel.

Traveler’s checks don’t expire, so if you don’t use them you can either keep them for future use or deposit them into your bank account once you’re home.

What To Do if Traveler’s Checks Are Stolen

If all of your cash is stolen while you’re traveling abroad, you’ll have next to no chance of getting it back.

However, if this happens with your traveler’s checks, you’ll likely get them replaced as long as you’ve complied with your check issuer’s purchase agreement. This is the primary benefit of traveling with traveler’s checks.

Bottom Line: Treat your traveler’s checks like cash. If you lose your checks, you may not get replacements if your check issuer has reason to believe you didn’t safeguard them appropriately.

Here’s what to do if your traveler’s checks are lost or stolen:

• Call the customer service phone number provided by your issuer or find it by accessing their website.
• Provide proof that the check is yours by submitting the check number, proof of purchase, and your identification. It’s important to have easy access to this information for this reason.
• If required by your issuer, provide evidence that you have reported your stolen check to the police.
• Be sure to return any other refund paperwork requested.

If you don’t comply, you could experience delays or even have your claim denied. After you’ve reported your missing check, your provider will void it and issue you a new check.

Some issuers even pledge to get replacement checks out to you within 24 hours!

Best Ways To Use Traveler’s Checks

The following are situations when you might consider using traveler’s checks:

1. No Access to Credit or Debit Card

If you don’t have a credit card or a debit card tied to your bank account, a traveler’s check could be a safe alternative to simply carrying lots of cash abroad.

This tip also applies if your particular credit or debit card isn’t accepted abroad. This is more likely to happen if your card is something other than a Visa or Mastercard, as those credit cards claim the widest global network.

2. Limited Access to ATMs

In many places, you can easily get cash in the local currency at an ATM once you arrive. This wouldn’t be a problem in Europe, for example, but ATMs are rare in some parts of the world. In addition, ATMs can malfunction, networks can be down, and machines might even run out of cash.

Traveler’s checks allow you to get local currency at participating banks, hotels, and other foreign locations without regard for these potential problems.

3. Access Good Exchange Rates 

Buying traveler’s checks can help you avoid bad exchange rates. If you decide to exchange currency once you arrive, you might not get the best conversion rates by doing this at the airport.

By purchasing traveler’s checks before you leave, you can lock in a set amount at the current exchange rate.

Read our guide for the best places to exchange currency.

4. Avoid Common Credit or Debit Fees

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 traveler’s checks. Although there may be a fee involved when you purchase or cash a traveler’s check, it might still be less than other fees your credit or debit card may charge.

Hot Tip: If your card charges a foreign transaction fee, it will typically be 3% of each purchase you make.

5. As an Added Safety Measure

If you’re traveling to a potentially unsafe region, traveler’s checks keep your money secure. Even if you’re in a relatively safe place, anyone who enters your room or has access to your bags could search for your money.

The main benefit of traveler’s checks is that they reduce your risk of theft or loss. Since they can’t be cashed without your signature and often require a photo ID, they are less appealing to thieves or pickpockets. They can also be easily replaced if you provide the issuer with the proper information.

Cons of Using Traveler’s Checks

Here are some reasons that might discourage you from using traveler’s checks:

1. Limited Availability for Use

In much of Europe and Asia, traveler’s checks are no longer widely accepted and cannot be easily cashed — even at the banks that issued them.

This means that cashing in traveler’s checks might require hunting down a bank branch or hotel that accepts them during business hours.

Bottom Line: Those relying solely on traveler’s checks may find that they are unable to cash them in many remote or rural locations.

2. Not All Banks Offer Them

Certain major banks, such as Bank of America, no longer offer traveler’s checks at all. This might mean ordering traveler’s checks online well in advance of your travel plans or having to find a new bank that offers them.

3. Potential for Additional Fees

If a company does offer traveler’s checks, it typically charges fees for both buying and cashing in a traveler’s check. While some banks offer them for free if you are a customer, others charge between 1% to 3% of the total purchase amount.

Check the math for your own situation, but using traveler’s checks could actually cost more than using an ATM or credit card abroad.

4. Bulky Paperwork

Not only are traveler’s checks a hassle to carry, but most companies also require that you keep proof of purchase for the checks to verify the check numbers if they are lost or stolen.

Both of these just add up to keeping track of additional paperwork.

Other Alternatives

Obviously, traveler’s checks aren’t your only option when it comes to obtaining foreign currency. Here are some other options you should consider.

Cash

Cash is convenient and relatively easy to exchange. You can bring money from home into a foreign bank or currency exchange location almost anywhere in the world. It can be easily exchanged without the worry of multiple bank fees or ATM fees adding up.

Hot Tip: Be aware: if you exchange your money in tourist areas, you might be hit with a bad exchange rate.

On the downside, carrying paper money is a risk since it can’t be replaced if stolen.

Debit Card

A debit card can be used at an ATM to collect cash. While not all ATM machines (especially in more rural places) accept foreign debit cards, you will find that most do.

Depending on your bank, you might even have to pay both an out-of-network ATM and an international ATM fee for this convenience.

Hot Tip: An out-of-network ATM fee is typically between $2 to $3.50 per transaction in 2021 and a typical international ATM fee can range from $2 to $7 per transaction (plus a 3% conversion fee), depending on your bank and card.

Most restaurants and stores accept foreign debit cards, but carrying a form of backup currency is always wise. Additionally, foreign transaction fees can add up quickly if you are using your debit card frequently.

Credit Card

Like debit cards, credit cards are small and easy to carry. Mastercard, Visa, and more recently, American Express, are widely accepted in other countries, so you can rest easy knowing you will be able to complete your purchases. You can also limit fees by getting a credit card with no foreign transaction fees.

A credit card also comes with fraud protection. You can dispute fraudulent charges and get them removed from your account if reported timely.

Hot Tip: While you can use a credit card for ATM transactions, you will be hit with a cash advance fee. It’s best to avoid doing this, if possible.

Prepaid Card

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.

While prepaid cards are locked with a PIN number, they can sometimes be difficult to use at ATM machines. Additionally, fees for foreign currency transactions can be as high as 7%, depending on the card.

Hot Tip: Booking hotels, airfare, or activities online will require either a credit card, debit card, or prepaid card.

Money Tips for Traveling Abroad

Do Your Research

Know which types of currency are accepted at your destination and how much of each type (if any) you should bring. Especially be aware of any cash you might need on arrival (to obtain a visa, exchange upon arrival, etc.) in case you can’t immediately locate an ATM or a currency exchange office.

Mix It Up

Carry a mix of cash, cards, and maybe even traveler’s checks. Ideally, the cards you bring with you shouldn’t have foreign transaction fees or ATM fees. Having some variety also helps if one of your cards isn’t accepted or your cash is lost or stolen. 

Tell Your Bank You Are Traveling

Always be sure to let your bank and credit card issuers know where you’re going and when so that your card isn’t declined when you try to make a purchase due to unusual activity.

If you exchange money at your bank, you will likely also get a better exchange rate.

Don’t Keep All of Your Money in 1 Place

Keep some of your currency or an extra card locked in your hotel room’s safe or in a money belt. In the terrible instance that you lose your purse or wallet, you would still have immediate access to additional money.

Final Thoughts

We’ve shown that traveler’s checks aren’t necessarily the most convenient way to take currency abroad, but depending on if you have limited access to debit or credit cards or they aren’t accepted where you are traveling, it might be worth it to bring some along.

Overall, if you’ve decided that traveler’s checks can be of use to you, taking some, along with some cash and a debit, credit, or prepaid card, may just be the smartest way to travel.