October 18, 2019
If you travel abroad regularly, you might have noticed that one of the frequently recommended items is traveler’s checks. You might have asked, “Why do I need traveler’s checks if I am bringing local cash, my ATM card, and credit cards?” Well, here’s why traveler’s checks can still be valuable for you, and if you’re traveling abroad anytime soon, you can order them the day before you leave and get checks delivered super fast. They are a lot safer than carrying cash, but they can be used like cash in stores that accept them.
The First Question: What ARE Traveler’s Checks?
Traveler’s checks are paper checks that can be used in the same way as you would use a regular personal check. However, the main difference is that with traveler’s checks, the amount is already pre-printed on the check and your bank is already aware that you will be using the check during your travel period.
This means that there is an increased level of security when using a traveler’s check. No one else but you can cash in the checks at a bank, and the amount written on the check cannot be changed by scammers or thieves. What’s more, since the bank is aware of your activity abroad, you can immediately be notified if there is any suspicious activity on your account (such as someone else trying to cash in your traveler’s check).
How Do I Use Traveler’s Checks?
Once you’ve ordered your traveler’s checks, you can use them in the same way as cash or personal checks as all retailers that accept personal checks will also accept traveler’s checks. When you receive your checks, you should immediately sign them according to the issuer’s instructions.
When you are going to make your purchase, all you need do is to fill in the recipient’s name and the date that you are using the check. In order to complete the payment, you will need to sign the check again in the presence of the recipient. This will ensure that the check is valid.
One of the biggest advantages to using traveler’s checks is that they don’t expire. This means that if you don’t spend the traveler’s check during your current trip, you can set it aside for future trips. You can also go to your bank and deposit the check back into your account.
Best Way to Use Traveler’s Checks
If you’re traveling to a place where ATMs are scarce, this probably means that many places don’t accept credit cards either! Using traveler’s checks can help you have access to a way to pay your bills if your cash on hand is running low.
Most hotels and high-end shops will accept traveler’s checks in place of cash, however, if you’re paying for food at a local restaurant, you might have trouble using your traveler’s check. If this is the case, most local banks and hotels will happily exchange your traveler’s check to local currency. However, this can be a challenging process, so you need to have your personal documents on hand, such as your passport and bank records.
Another reason why traveler’s checks is a great option to have is that you will be aware of the conversion rate between your home currency and the local country’s currency before you leave. You can get this information from your bank. This way, you can prevent any unpleasant surprises when it comes to exchanging cash. Furthermore, exchanging the cash in your home country before you leave usually nets you a better conversion rate compared to going to banks, hotels, and foreign exchange companies during your travels. You will avoid paying their fees in exchanging your money.
Have a Budget Before You Leave
Since traveler’s checks have a pre-printed amount, you won’t be able to arbitrarily change the amount when you travel abroad. This will force you to figure out a budget before you leave and stick to that budget while you are traveling. This will also prevent you from spending your budget on spontaneous purchases that you don’t really need.
Traveler’s Checks as a Safety Net
Considering the increased amount of security that you enjoy with traveler’s checks, you can use them as a source of emergency funds during your travels, especially if your trip gets extended unexpectedly. Since they won’t expire and they are less desirable to thieves and scammers due to the difficulty in getting them cashed, you can keep them indefinitely and without worry even if you’re traveling in unsavory areas. What’s more, if you alert your bank to traveler’s check theft and a scammer is still able to cash the checks out somehow, you have a chance at getting your money refunded.