What Is a Travelers Check?

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Tourists use travelers checks while traveling abroad.
Tourists use travelers checks while traveling abroad. (Image: Jupiterimages/Brand X Pictures/Getty Images)

Many consumers use travelers checks on vacation and business trips in lieu of cash. Travelers checks are a convenient way to make purchases without the worry or hassle of carrying cash, writing checks or paying credit card interest or fees. Travelers checks offer consumers a safe and effective way to manage their finances while traveling.

Definition

A travelers check is a pre-printed check in a fixed amount. Travelers checks allow the purchaser to use the check at various merchant locations. Checks are redeemable for cash or can be used to pay for products and services. Travelers checks are purchased for security and convenience purposes. Each check has a unique serial number so it can be identified and/or replaced if lost or stolen.

Purchase Process

Travelers checks can be purchased from various financial institutions such as banks and credit unions. They are also available at AAA offices or American Express travel service locations. Each institution has fees, limits, payment methods and restrictions for purchasing travelers checks so it is necessary to call ahead to verify information before making a purchase.

Usage Terms

The upper left corner of your check should be signed immediately upon purchase or as soon as possible after purchase. To use a travelers check, date the upper right corner and fill in the "pay to the order of" line with the name of the merchant you are making your purchase through. The cashier must witness you sign the lower left corner to verify your signature. If your check is for an amount that exceeds your purchase amount, the cashier will give you the difference in cash.

Advantages

If you lose cash, there is very little you can do to recover your loss. A major advantage of using travelers checks is they can be replaced within 24 hours when lost so you won't lose any money or time during your trip. Also, you can get travelers checks in any currency at local exchange partners around the world. They never expire and you lock in their value when you purchase them. Further, because traveler's checks are not linked to bank account or credit cards, using them reduce the risk of identity theft.

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