After having “non-rev” privileges with Southwest Airlines, Christy dove into the world of points and miles so she could continue traveling for free. Her other passion is personal finance, and is a cer...
Edited by: Keri Stooksbury
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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 Traveler’s checks might seem like an outdated choice, but they can still be useful in certain situations.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.
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.
You can still buy and use traveler’s checks in the U.S. and other countries.
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:
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:
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.
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.
Here’s what to do if your traveler’s checks are lost or stolen:
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!
The following are situations when you might consider using traveler’s checks:
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.
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.
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.
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.
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.
Here are some reasons that might discourage you from using traveler’s checks:
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.
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.
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.
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.
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 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.
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.
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.
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.
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.
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.
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.
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.
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.
While many larger banks are no longer offering traveler’s checks, they are still available at American Express and other smaller banks and credit unions. It is worth asking if your bank offers them and at what cost.
While some banks offer them for free if you are a customer, others charge between 1% and 3% of the purchase amount.
A traveler’s check offers a safer option than carrying around money. There are multiple safeguards in place to prevent fraud and if the checks are lost or stolen, they can be easily replaced.
Traveler’s checks do not expire. You can cash them in at any time — typically even at banks that don’t offer them for sale. This means you can go to your own bank and redeem your traveler’s checks.
To do this, date them, fill out the “Pay To” field (to your bank), and countersign in the presence of the cashier. Any unused value will be returned to you in cash.
American Express is the only large bank that offers traveler’s checks online. Its website offers a step-by-step process to order them.
You should check with your local bank or credit union to see if they might also offer this benefit.
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