Travellers cheques

Key takeaways

• Make sure to sign each cheque upon receipt and again in the presence of the cashier when making a purchase or cashing them

• Travellers’ Cheques are available at currency exchange offices, banks, post offices, and travel agents in major currencies like USD, CAD, GBP, and JPY

• Travellers’ Cheques are widely accepted in the US; check acceptance in other countries, especially in urban areas

• Can be kept for future use or refunded at a post office or currency exchange office, though buy-back rates may be less favourable

What are travellers’ cheques?

Travellers’ cheques are a form of prepaid cheque designed to help tourists safeguard their travel funds. They come with a fixed value and can be used in various currencies across the globe. These cheques have been a staple for international travellers for decades, offering a secure way to carry and spend money abroad.

How do travellers’ cheques work?

To use travellers’ cheques, you must sign each cheque upon receipt and then again in the presence of the cashier when making a purchase or cashing them. This two-signature system is a security measure to protect against fraud. It's also important to keep a record of each cheque's serial number, as this information is crucial for obtaining a refund if they are lost or stolen. The serial numbers of each cheque are usually found on the top right corner.

Where can you buy travellers’ cheques?

Though not as prevalent as they once were, travellers’ cheques can still be purchased at various locations, including Currency exchange offices, banks, post offices, and travel agents. They are available in several major currencies, such as US dollars, Canadian dollars, pound sterling, and Japanese yen, making them versatile for travellers visiting multiple countries.

Where can travellers’ cheques be used?

While travellers’ cheques are widely accepted in the United States, it's a good practice to confirm their acceptance in other countries by contacting local banks or retailers. Generally, they are more readily accepted in urban areas than in remote regions, where digital transactions or cash may be preferred. Travellers’ cheques are generally accepted in city locations but might be harder to use in remote areas.

Advantages of using travellers’ cheques

Travellers’ cheques come with a host of benefits:

• They have no expiry date, though they should ideally be used within six months of the date of issue.

• In the event of loss or theft, travellers’ cheques are easily replaceable, provided you have noted their serial numbers.

• They can be exchanged for local currency at various financial institutions, making them quite convenient.

Disadvantages of travellers’ cheques

Despite their benefits, travellers’ cheques have seen a decline in popularity due to several reasons:

• They can be cumbersome to carry and require the user to fill out details and sign each cheque.

• Their acceptance has waned over the years, with fewer retailers and banks dealing with them.

• Handling fees, commission charges, and cashing-in fees are often associated with travellers’ cheques, which can add up.

What fees are there?

When using travellers’ cheques, you may encounter various fees, typically ranging from 2-3% in commission charges. Additionally, handling fees and cashing-in charges may apply. These fees can vary significantly depending on the provider, country of use, and the specific bank, retailer, or agent. It's always recommended to inquire about these fees beforehand to avoid surprises.

What to do with unused travellers’ cheques

If you find yourself with unused travellers’ cheques after your trip, you have a couple of options. You can keep them for future travels, as they do not expire, or you can seek a refund at a post office or currency exchange office. However, be aware that the buy-back rates are usually less favourable than the sell rates.

Are travellers’ cheques worth it?

Travellers’ cheques offer a high level of security thanks to the requirement of signature verification and the ease with which they can be replaced if you have the serial numbers noted. However, they come with various fees, and there may be cheaper, albeit less secure, options available for the modern traveller.

What are the alternatives?

For those looking for contemporary alternatives to travellers’ cheques, there are several options:

• Regular credit and debit cards are convenient but may come with overseas transaction fees and ATM charges.

• If instead you’d like to minimise any potential fees, a travel credit card is your best bet. You may also be able to benefit from certain rewards including travel discounts, which can come in handy if you’re a regular traveller.

• Prepaid cards are a decent alternative. These are topped-up with money in advance, so you can pay for your purchases with the balance. You simply top up the card when you’ve run out.

• For those needing to exchange currency, it's wise to shop around for the best exchange rates. With the MoneySuperMarket comparison tool, you can easily compare rates and find the most beneficial options tailored to your financial needs.

Compare travel money with MoneySuperMarket

Currency comparison is made easy with the MoneySuperMarket comparison tool. You can find the best euro rate or any foreign exchange rate by answering a few questions about your finances and we’ll provide you with a list of tailored options for you to benefit from.