All about traveler’s checks, plus modern alternatives

Getting ready to travel? One thing to think about is how you’ll make purchases while you’re away. Traveler’s checks aren’t as common as they used to be. So you might want to consider modern alternatives that may offer the advantages of traveler’s checks and more.

Read on to learn more about the ins and outs of traveler’s checks. And find out about other options—credit cards, prepaid cards and mobile wallets, for example—that could help make the most of your trip.

Simply put, a traveler’s check is a paper document you can use for making purchases when you’re traveling, typically in other countries. It can be used like cash or a regular check.

Traveler’s checks—you may also see them referred to as “cheques”—may offer these benefits:

• Convenience. You might find traveler’s checks easy to carry when you’re on the go. Plus, traveler’s checks typically don’t expire.
• Security. Traveler’s checks are generally printed with a unique serial number—which means you may be able to get a refund if your checks are lost or stolen. Some restrictions and conditions could apply, so you might want to get details from the institution that sells you the checks.

Traveler’s checks are accepted at participating merchants like hotels, restaurants and stores. Just keep in mind that there may be fewer participating merchants than there used to be.

The checks are generally available in set denominations—$25 and $50, for example. 

When you purchase your checks, you may notice that they have a space for two signatures:

• First signature: You might be asked to sign each of your traveler’s checks when you buy them. If not, you may want to sign them as soon as possible. 
• Second signature: You’ll sign your traveler’s checks again when you’re making purchases.

It’s possible that certain fees may apply to traveler’s checks. For example, you may need to pay a fee when you purchase them or when you exchange them for currency once you get to your destination. There might also be a fee for depositing unused checks into your bank account.

Where to get traveler’s checks

While traveler’s checks might be harder to find than they used to be, they’re still available.

You may be able to purchase them at some banks, credit unions and travel-related service organizations.

You might consider using traveler’s checks in certain situations, including: 

• When you don’t have a credit or debit card. Some people may prefer to travel using modern payment options like credit and debit cards—you’ll read more about those in a bit. But if you don’t have either, you may find traveler’s checks to be an acceptable alternative.
• When you can’t access an ATM. If you find yourself in a place that doesn’t have an ATM on every corner, you can instead use your checks at merchants that accept them.
• When you want to exchange them for local currency. When you get to where you’re going, you might want to have some local currency on hand. You may be able to exchange your traveler’s checks for currency at certain banks or other financial institutions that partner with the traveler’s check company.

Today’s world offers a number of alternatives to traveler’s checks—options you may find faster, easier and more convenient. 

Here are a few to consider when you’re comparing your choices:

Credit cards

Carrying a credit card may be easier than carrying traveler’s checks. Plus, credit cards can be helpful for making large and online travel purchases like plane tickets and hotel reservations. 

Some credit cards may also come with benefits that could be useful while traveling. They may include things like credit card fraud protection and the ability to use a mobile app to track your purchases.

Keep in mind that foreign transaction fees may come into play when you use your credit card overseas. While this fee might vary between credit card companies, it could generally be in the range of 1%-3% of your purchase. You may also be charged a currency conversion fee. Often, this fee is part of your foreign transaction fee.

Some companies don’t charge foreign transaction fees. For example, none of Capital One’s U.S.-issued credit cards charge this fee.

If you’re traveling with your credit card, your credit card issuer may want to be alerted before you go. That’s because it might flag your purchases as fraudulent if it notices purchases made in an unfamiliar location. Thanks to the added security of its chip card, Capital One doesn’t require this notification.

Debit cards

When you’re traveling, a debit card can be just as easy to carry around as a credit card. And like a credit card, it can help protect against fraud. 

The big difference: A credit card lets you “borrow” money for purchases, while a debit card is used to make purchases with the money in your checking account.

It may be helpful to carry a debit card when you’re visiting a country that generally favors cash transactions. In that case, you could use your debit card at an ATM to get cash once you’ve reached your destination. And that may be safer than bringing cash with you and exchanging it for local currency once you’ve arrived. 

Keep in mind that you could be charged ATM fees when you use a debit card abroad. According to the Consumer Financial Protection Bureau (CFPB), some banks and credit unions don’t charge customers a fee for using their ATMs. But they might charge you if you’re not a customer—and that could be in addition to a fee charged by the operator of the ATM.

Also be mindful that some banks may charge a foreign transaction fee when you make purchases abroad with a debit card. You may also be charged a currency conversion fee—often, this fee is folded into the foreign transaction fee.

Some banks, though, don’t charge foreign transaction fees. For example, Capital One doesn’t charge this fee for its 360 checking account. 

If you take a debit card on your travels, your bank may ask you to notify it beforehand. That’s because it could notice transactions made in an unfamiliar location and potentially freeze your account. Capital One doesn’t require this notification, thanks to the added security of your chip card.

Prepaid cards

Like credit cards and debit cards, prepaid cards may be easier to carry around than cash. They may also offer some protections against loss, theft or fraud once you register them.

But with a prepaid card, you don’t “borrow” money like you do with a credit card—or use money from your checking account, like with a debit card. Instead, you typically add money to a prepaid card before making your purchases.

According to the CFPB, there are a few ways you can add funds to a prepaid card. For example, you can transfer money from your checking account or load funds at some retail locations or financial institutions.

It may help to know that you might be charged one or more fees for using a prepaid card. The CFPB notes that if you get your prepaid card at a retailer, you should find a summary of fees on the card’s packaging. If you get your card from a different provider—online or over the phone, for example—the provider needs to provide you with this information on paper or electronically.

Mobile wallet 

You’ll probably have your phone with you when you’re traveling, right? Using a mobile wallet to make purchases is another modern alternative to traveler’s checks.

A mobile wallet is essentially a digital version of your real wallet. Depending on the wallet, you may be able to store things like credit cards, debit cards, prepaid cards, boarding passes, hotel reservations, event tickets and other types of personal data. 

Convenience may be one of the benefits of mobile wallets. They allow you to make quick and easy payments using your phone or other mobile device when you’re on the go. Security may be another. Mobile wallets typically use advanced technology that prevents your actual account numbers from being stored in the wallet.

There are lots of mobile wallets to choose from. Researching your options could help you see which will work best while you’re traveling.

Also, it may help to know that some merchants might not take mobile wallet payments—for example, if they aren’t able to process those payments.

If you’re considering traveler’s checks for your next trip, you hopefully now know a few key things: how they work, where to get them and where to use them. This article may also have given you options that might work just as well—or maybe even better. 

They may include credit cards—which can offer rewards and other benefits—plus debit cards, prepaid cards and mobile apps.

Whichever option you choose for your purchases while traveling, here’s hoping you have a great time wherever you’re headed. Bon voyage!