What Are Traveler's Checks?
A traveler's check is a method of carrying around money that provides protection from loss or theft. If something happens to the traveler's checks before you spend them, you can get a refund. You must pay a fee to get traveler's checks and sometimes may have to pay another fee to cash them.
How You Buy Traveler's Checks
Traveler's checks can be purchased at banks, credit unions and through the traveler's check company. You must buy them in person. Well known brands include American Express, Thomas Cook and Visa. There is usually a fee of up to 2% of the purchase amount.
Types of Traveler's Checks
Traveler's checks are sold in several currencies including U.S. dollars, Canadian dollars, Japanese yen, British pounds and the European euro. They come in several denominations for each currency. It is a good idea to get traveler's checks in the currency of the country where you are heading. That way you wont have to pay a fee to convert currencies when you use the traveler's checks.
Using Traveler's Checks
When you buy traveler's checks you must sign each of them. Some traveler's checks allow two people to sign so that either person can use them. When the traveler's checks are used, you must countersign them in front of the merchant accepting them. They may also ask for identification. You should receive change in local currency. The merchant can then deposit your traveler's check into their bank like a normal check and they are later redeemed from the financial institution that issued them.
Making a Traveler's Check Claim
You should always keep your traveler's check receipt and the traveler's check numbers in a safe place. If your traveler's checks are lost or stolen, you must immediately report it to the traveler's check company and provide the missing check numbers. New traveler's checks will be sent to you, and the missing traveler's checks voided.
Popularity of Traveler's Checks
Until the 1990s, traveler's checks were very popular. By that time, credit cards and ATM machines became more widely used. It is now possible to get local currency from a local ATM machine using your ATM card from home. You can also use your credit card virtually anywhere in the world. Many travelers prefer these methods to access their money. However, they cannot provide the loss and theft protection that traveler's checks can.