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What is a Traveler's Check?

May 8, 2023

What is a travelers check and how do you use a travelers check? Learn more about when and why you might use this type of prepaid check.

You may not have heard of a travelers check before, but they can be really useful when you need a secure form of payment while traveling abroad. In this article we'll go over what travelers checks are, how to use a travelers check, and why they are often used by tourists traveling abroad. 

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What is a Traveler's Check?

What is a traveler's check and what are they used for? A travelers check is named very appropriately. It is a check that is often used by travelers who need a secure form of payment when traveling abroad or dealing with foreign currency. 

When learning more about what is a travelers check it's good to know that they are often called "travelers cheques" as well. It is a form of prepaid check, kind of like how a money order is a form of prepaid payment.

So what is a travelers check in relation to other forms of currency? Travelers checks are specifically an alternative to hard currency. So instead of carrying around cash while you're traveling, you can carry around travelers checks instead. This provides potentially safer payment alternatives to travelers who don't want to risk losing credit or debt cards or deal with lost of stolen cash because the travelers check issuer usually provides security insurance of some kind against lost of stolen checks. 

What is a traveler's check? Definition

How Do Travelers Checks Work?

Now that you know more about what is a travelers check, you can learn more about how they work. Travelers checks work like cash, except this cash is a slip of paper that you must sign for it to be used by whoever you are paying. Travelers checks can also be exchanged for local currency when a vender won't accept a check. But either way, you won't have to carry around cash on you all the time while traveling. 

What is a travelers check in relation to foreign currencies for travelers? You can buy travelers checks in a variety of different foreign currencies and monetary increments. They also don't have an expiration date so that they can operate much like cash does, but with an added security of a check signature behind them. 

Currency Graphic

These checks are also not linked to your bank account or checking account, so if someone does steal them, they won't gain access to your checking account or your credit or debit cards. 

First, you'll visit a financial institution that issues travelers checks. Then you'll purchase the travelers checks you need in whatever foreign currency you might need. When you purchase the travelers checks, this gives the checks their monetary worth, allowing you to use them like cash. Lastly, when you go to use a travelers check, you'll endorse the check with your signature. 

Do People Use Traveler's Checks Anymore?

Now you know more about what is a travelers check and how they work, but are they still used today? Travelers checks were first issued in 1772 by the London Credit Exchange Company. In 1890, American Express copyrighted this product as a way for travelers to safely make foreign transactions.

They were largely popular among travelers as a safer way to make foreign transactions up until the late 1980s when the product began being replaced by credit cards, prepaid cards, debit cards, and even special travelers cards with security features for lost of stolen cards. 

Many financial institutions, like American Express, still issue travelers checks, but there are many other alternatives to travelers checks available now. Now travelers and tourists can use debit cards and credit cards that can accommodate to the local currency and exchange rates of wherever you are traveling.

However, you may need to tell the financial institution that facilitates your bank account before traveling abroad to properly use foreign exchange capabilities on your card when abroad. Otherwise, your account may automatically lock when you try to use it in a foreign place. 

Way your options for making foreign transactions when traveling, because there are different foreign transaction fees and exchange rates to compare with each option. 

Alternatives to Travelers Checks

Knowing what is a travelers check will help you better way your payment options when traveling. There are many advantages to using travelers checks. For instance, the money can be replaced when reported lost or stolen. They are also widely accepted internationally and can be converted into cash for the local currency wherever you are.

But after learning what is a travelers check, you may still decide to go with another option. There are now many alternatives to travelers checks that can potentially come with less cons and more benefits. 

Travel-Friendly Credit or Debit Cards

If you have a travel-friendly credit or debit card, then that can be a great option to use while abroad. Not all credit cards and debit cards can be used outside of the country though, so do your research. You want a credit or debit card that works worldwide and that ideally also has the bank you are using present in that country. You also want to use a bank card that charges low or no foreign exchange fees or ATM fees so you can access cash without paying a lot in fees. 

ATM Graphic

Prepaid Cards

Prepaid cards are a great tool for travelers because they have their own account with their own funds outside of your checking account. So instead of putting your checking account at risk, you can deposit a set amount of money you want available on your trip to a prepaid debit card instead. Now, if your prepaid card is lost or stolen, card thieves only have access to whatever money you deposited onto the card and not your entire checking account. 

Prepaid cards can also help you budget for the trip. You can put only the money you want to spend on the trip on the card to avoid overspending or going over budget while you travel. 

In Conclusion,

Today there are many options available for travelers who want to safely travel abroad without risking lost of stolen money or cards. Learn what is a travelers check so you can make the best decision for your trip. Travel nationally and internationally safely by researching and weighing your options so you can keep your money safe.