Traveler's Checks vs. Cashier's Checks: What Is the Difference?

Traveler's Checks vs. Cashier's Checks: What Is the Difference?
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Traveler's checks are an outdated form of payment issued by banks and used by travelers abroad, while cashier's checks are a more commonly used secure form of payment for purchases and expenses made domestically.

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Differences Between a Traveler's Check and Cashier's Check

Traveler's Check

Cashier's Check

Funds backed by bank?

Yes

Yes

Widely available?

No

Yes

Widely accepted?

No

Yes

Specific to one payee?

No

Yes

Where and when to use

Traveling abroad for purchases or exchange

Domestically for purchases and expenses

Best uses

When digital payments aren't readily accessible

For large purchases when a personal check is not accepted

If lost or stolen...

Can be reissued if serial number is known and you can reach someone at the issuing company.

Difficult to replace via a lengthy, multi-step process that may require special insurance.

Security

Requires photo ID and a signature comparison to use.

May only be cashed by payee and photo ID is required.

Cost to use

Charges for use vary by country and exchange partner. Redeeming with issuer may be free.

Banks charge a small fee to create the check.

Pros

Helpful when digital options are unavailable or you want a payment option not connected to personal finance information.

Available in large amounts, widely accepted for large purchases and funds availability is typically fast.

Cons

Not a very popular form of payment and difficult to purchase.

Susceptible to frauds and scams.

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What Is a Traveler's Check?

A traveler's check, or traveler's cheque, is a numbered paper document issued in fixed denominations by a financial institution for use as local currency in a foreign country. The checks' serial numbers and dual signature format allow them to be traceable and secure.

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Traveler's checks were commonly sold at banks and credit unions before digital forms of payment became easy to access for international travel. They have two signature lines: one to be signed by the traveler in front of the issuer and the other at the point of sale in front of the payee and presented with a photo ID.

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Do People Still Use Traveler's Checks?

Traveler's checks are not easy to buy anymore, but existing ones are still usable. For instance, though American Express Travelers Cheques are no longer sold, they are still redeemable among some retailers and may be returned for deposit into your bank account.

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Traveler's checks are not used nearly as often for travel as credit cards, debit cards and prepaid cards, which have grown more convenient and less costly to use when traveling.

Where Can I Get Traveler's Checks?

Many banks and credit unions ceased offering traveler's checks, but check with your local financial institution or a travel-related organization to learn if there are options.

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What Are Traveler's Checks Good For?

Using traveler's checks may be helpful if you lose your credit or debit card, don't have access to digital payments or are in an area without ATMs. They can also be handy when you don't feel comfortable using a payment method associated with your checking account or credit card account number.

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Because exchange rates are locked in when purchasing traveler's checks, they may save you money during your travels.

Do They Expire?

The American Express website confirms that American Express Travelers Cheques do not expire. This tends to be the case with all traveler's checks and can be verified by contacting the issuer.

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What Is a Cashier's Check?

A cashier's check is a paper check issued and backed by a financial institution. You purchase the check with cash or by a transfer from a savings or checking account. The bank check is then written to a specific payee for the amount requested, and the funds are drawn from the issuing bank's account.

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What Are They Used For?

Because they are a secure form of payment that the bank guarantees, cashier's checks are often used for large purchases instead of regular checks. A payee may be more comfortable receiving a large amount of money via a cashier's check over a personal check. Funds from a cashier's check are generally available within one to two business days.

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Where Can I Get Cashier's Checks?

A cashier's check must be purchased at a financial institution. Most banks charge customers a small fee for this service, but some waive it depending on your account type. Unlike money orders, cashier's checks are not available for purchase at a check-cashing store or retailer.

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What Is a Cashier's Check Good For?

Instances that require a large amount of money, such as a down payment on a home, the payoff of a loan or the signing of a lease, are good opportunities to use a cashier's check. In each case, a personal check or pile of cash may not be accepted. The processed cashier's check is also proof of payment.

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Do They Expire?

According to Chase Bank, unlike personal checks that expire after six months, cashier's checks should be valid as long as the bank account is still active. But unused cashier's checks may be subject to a state's unclaimed property laws. For instance, the California State Comptroller advises residents to take action on cashier's checks within three years.

Which Is Safer: Traveler's or Cashier's Checks?

Traveler's and cashier's checks are secure forms of payment, and both checks work well for their respective purposes. And both can be subject to scams, fraud, theft or loss.

Traveler's check use requires a photo ID and two signatures from the user but are not made out to anyone in particular. A cashier's check, on the other hand, can only be cashed by the named payee. If lost, the replacement process can be lengthy.

Both types of checks can be replaced if lost, but it can be a hassle and take time to get a refund or replacement check.

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What Are My Alternatives?

It's challenging to find traveler's cheques for purchase because there are now more convenient ways to access and use money while traveling. Major companies like Visa, Mastercard and American Express no longer issue paper cheques because they offer digital and online banking options for travelers.

Most credit card companies have debit and credit cards that can be used without foreign transaction fees. Prepaid travel cards and peer-to-peer apps are options in many countries, and foreign currency can be received at an ATM.

In the case of large purchases where a cashier's check might be used, a debit card, credit card or ACH transaction is now accepted.

Knowing which payment type is most convenient and comes with fewer fees is essential for your personal finances at home or while traveling.

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