What is a Traveler’s Check?

A quick guide to international payment options

A traveler’s check (or traveler’s cheque) is a pre-paid check for a set amount of money, usually issued by a bank and often used during international travel.

Traveler’s checks are considered more secure than cash, as they require a matching signature and ID. If they are lost or stolen, the bank can cancel the missing checks and issue replacements. Traveler’s checks have been losing popularity to credit cards, debit cards and ATMs because cards are usually cheaper (some banks charge fees for traveler’s checks), easier and widely accepted abroad.

How to Use Traveler’s Checks

A bank or other institution will issue checks in set amounts (usually $25, $50 or $100) in the currency you choose. Upon receiving the check, you would sign it on the designated line, which is usually the one on top, and only in that one spot. Write down the serial numbers and keep them separate from the checks, so if the checks are lost or stolen the bank can easily cancel them.

When you want to use the check, you would sign the other line, which is usually on the bottom of the check. The second signature should be done in the presence of whoever is receiving payment and they should also ask for ID. If change is due, it will be given in local currency.

Due to fees and difficulty exchanging the checks, they have become unnecessary in most situations. But the checks are still useful to people who would rather not use credit, those who will not have access to ATMs at their destination or those traveling to countries with favorable exchange rates (like China). The checks are not linked to your bank accounts or other personal information, which makes them an attractive feature for those concerned with security.

You can find traveler’s checks through American Express, select drug stores and supermarkets or you can check your bank. American Express is the largest issuer of traveler’s checks and they were the first bank to issue traveler’s checks in 1891.

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