Prior to traveling, purchase travelers checks through a variety of financial institutions, such as American Express or your bank. Travelers checks can be purchased in different currencies, such as American dollars, Canadian dollars, Australian dollars, euros, pounds, sterling or Japanese yen. Some institutions charge an additional fee to purchase the checks, but many don't rely on the exchange rate to make a profit. Travelers checks are usually sold in packs of five or 10 checks in denominations of 10, like $20, $50 or $100.
Travelers checks also come with a purchaser's agreement, which should be carried with you but separate from the checks when traveling.
Travelers checks can be used like cash at many locations catering to travelers, such as hotels, restaurants and stores, and in different countries. However, depending on where you will be spending your money, it helps to exchange the travelers checks into local currency at a bank upon arrival.
Not every place cashes travelers checks, however. Some stores or shops, especially in rural or underdeveloped areas, require you to have cash. Additionally, the currency in which the travelers checks were issued can make them difficult to cash. For example, some places may not cash a travelers check issued in euros. Travelers checks issued in American dollars are most commonly honored, even abroad, .
Some locations require proof of purchase and a photo ID to cash a travelers check. This is why you should take a copy of your purchaser's agreement with you.
Historically, the biggest advantage of travelers checks is that they're insured against loss or theft. The issuer will usually replace the lost or stolen travelers checks in a short period of time if you have the proper documentation. The purchaser's agreement includes a 24-hour contact number you can call if loss or theft occurs.
Traveler check issuers oten require identification, as well as a purchaser's agreement, which is why you should carry the agreement with you while traveling. Keep a copy of the agreement and the identification numbers at home in case this information also is lost or stolen. Without the purchaser's agreement, it takes longer to get travelers checks replaced.
With the growth of the credit card industry, many travelers are opting to use credit cards when they travel rather than travelers checks. The advantages of credit cards is that they are accepted more universally, and can also be used at ATMs to withdraw cash. The disadvantages of credit cards are the fees that are often levied against the cardholder for purchases outside the country of origin. Additionally, if a credit card is stolen, it can be used for identity theft. In addition, if that card is a check card, it is tied to your bank information.
Some financial institutions and even travel agencies, such as AAA, issue travel money cards, which are debit cards, with a credit card logo, that can be used when traveling. Money cards are not tied to your personal bank account.
