All about traveler’s checks and modern alternatives

If you’re getting ready to travel, you may be thinking about how you’ll make purchases while you’re away. Traveler’s checks used to be a popular choice, but modern alternatives may offer more convenience.

Find out how traveler’s checks work, and explore some other payment options for travel.

What you’ll learn:

• Traveler’s checks are paper documents that can be used to make purchases or exchanged for local currency when traveling abroad.

• Traveler’s checks have unique serial numbers, so they can be replaced if lost or stolen.

• For extra security, traveler’s checks require two signatures—one when purchasing the check and one when using it to make a purchase.

• Credit cards, debit cards, prepaid cards and mobile wallets are modern alternatives to traveler’s checks you may find more convenient.

A traveler’s check is a prepaid paper document used to make purchases while traveling, often in foreign countries. You may also be able to exchange traveler’s checks for local currency. They’re usually available in set amounts, such as $20 or $50.

The checks—you may also see them referred to as “cheques”—are typically printed with a unique serial number. This number can help travelers get a refund if their checks are lost or stolen, making them more secure than cash.

There may be fees to buy and use traveler’s checks. Plus, some financial institutions may charge a fee when you cash unused traveler’s checks or deposit them into an account.

Traveler’s checks still exist, but they aren’t as readily available as they used to be. Some institutions no longer issue them. But you may still be able to buy traveler’s checks at some banks, credit unions and businesses that offer travel-related services.

Traveler’s checks work much like cash at any business that accepts them. Some hotels, restaurants and retail stores may take traveler’s checks, but they’re not as widely accepted as they once were. 

You may be able to exchange traveler’s checks for local currency at banks, exchange offices or some hotels. And if you have unused traveler’s checks after your trip, you might be able to deposit them in your bank account or cash them in. But all of these options may come with fees.

Traveler’s checks generally work like this:

1. Purchase: The first step is buying the traveler’s checks. They’re harder to find these days, but some banks and credit unions may still offer them.

2. First signature: Each traveler’s check usually has space for two signatures. You may be asked to sign each of your traveler’s checks when you purchase them. If not, sign them as soon as possible afterward.

3. Second signature: You’ll typically be asked to sign traveler’s checks for the second time when you use them to make a purchase. This dual signature method helps merchants confirm that the person using the check is the original purchaser.

Here are some advantages and disadvantages of using traveler’s checks. 

Here are a few situations when you might consider using traveler’s checks: 

• You don’t have a credit or debit card. If you don’t have either, traveler’s checks could provide an alternative.

• You can’t access an ATM. If you find yourself in a place without an ATM, you could use traveler’s checks at merchants that accept them instead.

• You want local currency on hand. When you get to where you’re going, you could exchange some of your traveler’s checks for local currency.

Credit cards, debit cards, prepaid cards and mobile wallets are modern alternatives to traveler’s checks. They’re more widely accepted than traveler’s checks and are generally considered convenient, safe payment options for international travel. Here’s some more detail about each of these payment methods:

A credit card can be a convenient way to pay while traveling. Plus, if your card is lost or stolen, many card issuers may offer fraud protection. For example, Capital One offers $0 liability for unauthorized charges. 

Another benefit of using a credit card while traveling is that you could earn rewards on your purchases. Some credit cards offer other benefits like travel insurance and the ability to track your purchases on the go via a mobile app.

Keep in mind that some issuers may charge foreign transaction fees—typically 1%-3% of the purchase amount—when you use a credit card abroad. Capital One doesn’t charge foreign transaction fees. View important rates and disclosures.

A debit card is another convenient payment method to use when traveling. You can make purchases with a debit card the same way you would with a credit card—but instead of borrowing the money from the card issuer, the funds come from your linked checking account. 

You can also use a debit card to withdraw cash in local currency from an ATM, but the ATM operator may charge a fee. And some banks and credit unions charge a fee to use their ATMs if you’re not a customer.

With a prepaid card, you don’t borrow money like you do with a credit card. And you don’t use money from your checking account, like you do with a debit card. Instead, you load money onto a prepaid card before using it. Once a prepaid card is registered, it may offer some protection against loss, theft or fraud. Keep in mind that you might be charged fees for using a prepaid card.

If you’ll have a mobile device with you while traveling, you could consider using a mobile wallet to pay. A mobile wallet is like a digital version of your physical wallet. It may offer enhanced security features like information encryption. And you can use it to store things like credit cards, debit cards, prepaid cards, boarding passes, hotel reservations, event tickets and other types of personal data.

Traveler’s checks could offer a way to pay while you’re on a trip. But they aren’t as easy to find or use as they once were. Modern options like credit cards, debit cards, prepaid cards and mobile wallets may offer more convenience. 

If you’re planning a trip, you could consider a travel rewards credit card like the Capital One Venture or Venture X cards. You could earn as much as 10X miles on hotels and rental cars and 5X miles on flights and vacation rentals booked through Capital One Travel.