The Evolution of Traveler’s Checks

These days debit cards, credit cards, and digital wallets do most of what traveler’s checks do. Which means those checks really don’t need to be a primary resource for accessing cash and paying for things when traveling abroad, especially if ATMs are easily accessible. However, that doesn’t mean they’re useless. They make for a good backup plan.

How they work

Because plastic and digital payment methods have almost replaced traveler’s checks, you might not be familiar with how they work. In the past, travelers would go to their credit union or bank and purchase pre-printed checks in set denominations (e.g. $20, $100, $250, etc.) that they could then give to merchants, hotels, and banks abroad to receive local currency in exchange.

If stolen, traveler’s checks can easily be canceled and replaced and, because they aren’t linked to your banking accounts (like debit and credit cards are), there’s no risk of having your accounts emptied by thieves. Traveler’s checks can only be cashed or spent by you when you present a valid I.D. and double sign the checks.

How to use them now

Traveler’s checks are a good backup plan for accessing money when traveling to countries that might not have many easily or safely accessible ATMs. ATMs can also malfunction or run out of cash and credit card payment networks can go down. Traveler’s checks can be used to get cash at banks, most hotels, foreign exchange offices, and some large international retailers, although the number of locations they can be exchanged at is shrinking and it can be a time-consuming process. You can go online or call customer service for the issuer of the checks for a list of local places that accept traveler’s checks.

When you get the checks from your financial institution, you’ll sign each check on one line. When you use them to get cash, you’ll sign the second line and the merchant will compare the signatures and look at your government-issued I.D., which will also have your official signature. Directly after getting your checks, you should record each check’s serial number and matching denomination in a safe place that will be kept separate from the checks when you travel. If the checks are stolen, you’ll need the check numbers to request replacements and cancel the stolen ones.

Traveler's checks never expire, so you should be able to cash them at home, or deposit them into your bank account once you’re home.

Prepaid cards

Some financial institutions that used to issue traveler’s checks now only offer prepaid cards, which work like a debit card but aren’t linked to your checking account. These cards usually provide low ATM fees, emergency cash if you lose the card, and zero liability fraud protection.

Depending on your cash, currency, and fraud protection needs while traveling, traveler’s checks might still be a viable option for you, especially as a back-up plan should your primary method of paying for things stop working or be stolen.