Thinking about using traveler's checks on your next trip abroad? Here's what you should know about purchasing, cashing, and using traveler's checks.
What are Traveler's Checks?
Traveler's checks are preprinted checks that are issued for a fixed amount of money. They function like cash, acting as prepaid money that can be used to buy goods or services in the local currency and provide protection from loss or theft since the check holder must provide identification and signature verification in order to cash the check. Therefore, traveler's checks are considered a safer method of carrying money abroad.
Purchasing Traveler's Checks
Follow this step-by-step process for purchasing a traveler's check.
- Submit the amount of money you want to carry and purchase the travelers check from a bank, credit union, or travelers check company in person. Well, known brands include CitiBank, Visa, and American Express.
- Pay the purchasing fee, which is usually up to 2% of the submitted amount. Many financial institutions provide it for free though.
- Pay the exchange rate fees.
- Sign the travelers check once you receive it.
Cashing Traveler's Checks
Follow this step-by-step process for cashing your traveler's check.
- To get your money back go to the main branch office of the bank and countersign the check in the presence of the cashier, who is required to compare the signatures.
- Make a purchase by countersigning the check in front of the merchant.
- Any change due will be returned to you in local currency.
- The merchant will then deposit the traveler's check into their bank account as he would a normal check, which is later redeemed from the financial institution that issued the check.
Advantages of Traveler's Checks
Traveler's checks are favored as a secure way of carrying money abroad. They are difficult to counterfeit and offer several qualities of convenience. Some of the ways in which traveler's checks are beneficial for international travelers to include:
- Security measures to help prevent counterfeiting, including its raised texture, holographic thread, and watermarks.
- Replacement if lost or stolen.
- Sold in several currencies including U.S. dollars, British pounds, European euro, Canadian dollars, and Japanese yen.
- Accepted in many countries worldwide and come in several denominations for each currency.
- Accepted at the same exchange rate as cash with no conversion fees.
- No expiration date.
- Some allow two different people to use them.
However, like any currency exchange option, traveler's checks do have their drawbacks. Traveler's checks may include fees, commission, and do not offer the best exchange rate.
Tips for Carrying and Using Traveler's Checks
- Keep your receipts. Always keep your travelers check receipt and the travelers check numbers safe with you.
- Treat traveler's checks like cash. Keep your traveler's checks safe. If they are lost or stolen and your travelers check issuer has reason to believe that you were not responsible with them, you may be declined a replacement or refund.
Traveler's Check Lost or Stolen?
If your traveler's check was lost or stolen, follow these steps to ensure your money is safe.
- Immediately report the incident to the bank or company that issued your travelers check.
- Provide the missing check numbers.
- Provide evidence of purchase and proof of your identity.
- If no one attempts to cash your checks after you've reported them stolen, new traveler's checks will be sent to you and the missing traveler's check is voided.