Do I need traveler’s checks when going abroad?

Group of young women posting while traveling abroad with traveler's checksImage: Group of young women posting while traveling abroad with traveler's checks

In a Nutshell

With credit cards and debit cards so widespread, traveler’s checks are often dismissed as a relic of the past. But traveler’s checks still have their uses in the modern age of travel — and in some rare cases, they could still be your best option.

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While planning a trip abroad can be exciting, it can also induce major financial anxiety. What kind of currency should you take? Where can you exchange money? How much cash should you carry?

The modern globetrotter has several cash equivalents to consider. Credit cards and debit cards — especially those with no foreign transaction fees — are the most obvious option, as such cards are now widely accepted abroad. Traveler’s checks might seem like a more outdated or unfamiliar choice, but they can still be useful in certain cases.



What is a traveler’s check?

In short, a traveler’s check is a check issued to you in exchange for your cash. It typically requires your signature at two separate occasions — first in the presence of the agent issuing the traveler’s check, and again when you use the check to make a purchase.

You can typically purchase traveler’s checks at banks and credit unions. American Express recommends calling your preferred location ahead of time to verify important details like the fees, restrictions and exchange rates available for traveler’s checks.

Once you’ve obtained a traveler’s check, you can use it in a couple of different ways.

  • Exchange it for local currency abroad. Companies that issue traveler’s checks, such as American Express, can partner with banks and foreign exchange partners around the world. You can visit one of these locations to cash in your traveler’s checks for local currency when traveling abroad.
  • Use it to pay for products and services at accepting merchants. Some stores or restaurants still accept traveler’s checks as a form of payment in their own right. Hotels may also allow you to use traveler’s checks to pay for rooms and other services.

How do I cash traveler’s checks?

As noted above, traveler’s checks require your signature in order to be cashed. Each one has a unique number and may be refunded if lost or stolen.

This additional layer of safety makes traveler’s checks worth considering, but does it make them any safer than the credit card or debit card that may already be in your wallet?

In certain cases, perhaps, though many card issuers have put in place ID theft measures that make the answer less cut-and-dry.

Let’s go over some of the reasons you might consider using a traveler’s check. Then you can decide whether traveler’s checks are right for you depending on your destination and your travel needs.

When should I use traveler’s checks?

Three situations stand out as times to consider using traveler’s checks.

1. When you don’t have a credit or debit card

If you don’t have a credit card or bank account, a traveler’s check could be a safe and reliable way to take the necessary amount of cash abroad.

If you don’t want to bother with traveler’s checks and you’re interested in getting a credit card before a trip,  you can shop for travel rewards credit cards on Credit Karma. Or if you’d rather use a debit card, read our tips on using debit cards for international travel.

2. When you want to avoid certain fees and expenses

Before going abroad, you should check to see if your credit and debit cards charge foreign transaction fees.

If they do, you may be charged a fee every time you make a purchase with your card in a foreign country. Add that to any ATM fees your card provider may charge, and using plastic abroad could get very expensive. In that case, it might make more sense to use traveler’s checks. Although there may be a fee involved when you cash a traveler’s check, so be sure to compare that potential cost to any foreign transaction fees your credit or debit card may charge.

FAST FACTS

What is a foreign transaction fee?

A foreign transaction fee is a fee that your card issuer charges if you use your credit card in a foreign country or if you use it to make purchases in a foreign currency. A typical foreign transaction fee amount is 3% of each purchase you make.

3. When you need an extra safety measure

If you’re traveling to a potentially unsafe region, carrying paper currency can be risky. 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 can be less appealing to pickpockets. And, unlike debit or credit cards, they don’t link to your personal accounts (or give potential thieves the ability to spend from those accounts, even for a short time).

Traveler’s checks can also be a good choice in the event that your particular credit or debit card isn’t accepted abroad. This can be more likely to happen if your card isn’t a Visa or Mastercard. Typically, Visa and Mastercard are accepted in more places and claim the widest global acceptance because of the lower fee structure.

Why traveler’s checks can be a hassle

According to travel expert and Travel Addicts writer Laura Longwell, traveler’s checks might not be worthwhile.

“While still extremely useful [as a replacement] for carrying large amounts of cash and guarding against theft, acceptance of traveler’s checks has significantly declined,” she says.

Cashing in traveler’s checks might require hunting down a bank branch or hotel that accepts them and having to visit during business hours.

Longwell warns that the convenience of traveler’s checks might be further limited by location.

“In Europe, there is an increasing skepticism of traveler’s checks,” she says.

And then there’s the matter of getting traveler’s checks in the first place.

Certain major banks, such as Bank of America, no longer offer traveler’s checks at all. Other companies that do, such as American Express, may charge various fees, which means that buying and cashing (which may also have an associated fee) a traveler’s check could ultimately cost more than using an ATM abroad.

If you still like the idea of using traveler’s checks but want to avoid the hassle, prepaid cards could be a good alternative. Longwell says prepaid cards are among the most popular choices for people with difficulties getting a credit card. Just make sure to look into foreign transaction fees before choosing a card.

Is a credit check required to get a prepaid card?

Typically, no. A prepaid card stores money that you preload onto it, so there’s no debt involved. No debt means there’s no need for a credit check.

Heads up: What to know before you go

Making the best decision about currency requires a bit of planning. Here are four things you can do to help your trip go smoothly.

Get familiar with the local currency

Be sure to do your research to find out which types of currency are accepted at your destination and how much of each you should bring. This could include calling your hotel, travel agent or tour guide ahead of time to ask a few questions about local practices and prices.

Keep your banks in the know

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 because of unusual activity. You can also go through your bank to exchange currency before your trip, which could mean getting better rates than you would in an airport.

Plan to carry a mix of cards and cash

Besides cold, hard cash, this can include debit, credit and prepaid cards. Ideally, the cards you bring with you shouldn’t have foreign transactions fees or ATM fees.

Don’t keep all of your cards and cash in one place

Keeping some of your currency in a hotel room safe, for example, means that losing your purse or wallet shouldn’t leave you completely stranded.

Carrying all your cash at one time can be risky, but you’ll likely need to carry some cash for certain purchases. Instead of going out with all your money on hand, consider carrying just what you’ll need for the day and leaving the rest stored in a safe place.


Bottom line

Using a traveler’s check isn’t the most convenient way to take currency abroad, but depending on where you’re going and what your needs are, it might be worth the hassle.

If you have limited or no access to debit or credit cards — or if you’re worried about having your cash stolen — packing some traveler’s checks, along with some cash or a prepaid card, may be the smartest way to travel.


About the author: Sarah C. Brady is a San Francisco–based financial consultant, workshop facilitator and writer. In addition to writing for Credit Karma, Sarah writes for Experian, LendingTree, Magnify Mo… Read more.