Traveler’s checks, once a staple for international travelers, have largely been replaced by more modern payment methods. But do people still use traveler’s checks? This guide explores the current relevance of traveler’s checks, their history, advantages, and alternatives, providing you with the information you need to make informed decisions about managing your money abroad.
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Alternative text: A traveler displaying a set of traditional traveler’s checks.
How Traveler’s Checks Used to Work
Traveler’s checks are prepaid, fixed-amount checks that function similarly to cash. Travelers could use them to purchase goods or services or exchange them for local currency. Major financial institutions issued these checks, and banks and credit unions sold them, although their availability has significantly decreased in recent years. Each check has a unique serial number. If a check was lost or stolen, the issuing company would cancel it and issue a replacement, offering a layer of security.
They were available in various fixed denominations and currencies, which was beneficial in countries with fluctuating exchange rates. They also didn’t expire. Traveler’s checks were not linked to a personal bank account or line of credit, reducing the risk of identity theft. A dual signature system—signing upon purchase and again upon cashing—was designed to prevent unauthorized use.
The Decline of Traveler’s Checks
While many banks, hotels, and retailers used to accept traveler’s checks, the increasing popularity of credit cards and prepaid debit cards has made it increasingly difficult to find places that will cash them. Cards like Visa TravelMoney, which offer zero liability for unauthorized use, have become a preferred option.
A Brief History
The concept of traveler’s checks originated in 1891 with Marcellus F. Berry, an employee of American Express. James C. Fargo, the president of American Express, had difficulty cashing checks during a trip to Europe, inspiring Berry to create a solution: a check with the bearer’s signature for verification.
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Alternative text: Marcellus F. Berry, the American Express employee credited with inventing the modern traveler’s check.
Where Can You Still Get Traveler’s Checks?
Although less common, some companies still offer traveler’s checks. These include Visa and AAA. Note that these often come with purchase fees. AAA now primarily offers prepaid international Visa cards instead of traditional paper checks. In the U.S., American Express locations are a primary source. Traveler’s checks can also be purchased online through the American Express website with a registered account. Visa offers traveler’s checks at Citibank locations and other banks.
Cashing Traveler’s Checks Today
If you have traveler’s checks, you can often deposit them directly into your bank account. Some hotels and resorts may also cash them for guests. American Express provides an online service for redeeming their traveler’s checks, allowing for direct deposit into a bank account.
Advantages and Disadvantages Revisited
Traveler’s checks were useful for tourists who wanted to avoid the risks of carrying large amounts of cash. The ability to replace lost or stolen checks offered peace of mind, especially before the widespread adoption of credit cards and ATMs. However, the disadvantages are becoming more pronounced:
Pros:
- Replaced if lost or stolen
- Do not expire
Cons:
- Outdated and less widely accepted
- Purchase fees
- Less convenient compared to modern payment methods
Modern Alternatives to Traveler’s Checks
Credit and debit cards with low or no foreign transaction fees are a primary alternative. Prepaid travel cards are also a popular option, allowing you to withdraw local currency from ATMs and make purchases without linking to your main bank account.
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Alternative text: A person using a credit card to pay for a purchase while traveling.
Prepaid cards provide security against draining your bank account if lost or stolen, and credit cards offer similar protections. Dedicated travel cards can also help minimize the risk of exposing your primary card details. Visa and MasterCard offer prepaid cards specifically designed for international use.
When considering travel cards, look for low ATM fees, local functionality, emergency cash services, and zero-liability fraud protection. Always compare fees to determine if a travel card is the right choice for you.
Conclusion: Are Traveler’s Checks Still Relevant?
Do people still use traveler’s checks? While traveler’s checks offered a secure way to carry money abroad, their popularity has significantly declined. The convenience and widespread acceptance of credit cards, debit cards, and prepaid travel cards have made traveler’s checks less practical. While they still offer some security, the fees and limited acceptance make them a less attractive option for most modern travelers. Consider the alternatives to determine the best way to manage your finances on your next trip.
