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Before the age of digital payments, traveler’s checks were considered one of the safest and most convenient ways to carry money while traveling, especially abroad. Though their popularity has waned with the rise of credit cards and mobile wallets, traveler’s checks do still exist and are issued by a limited number of banks and credit unions.

Whether you’re curious about their modern use or holding onto a few from a past trip, understanding traveler’s checks can help you make informed financial decisions on your next journey.

Traveler’s Checks Defined

Traveler’s checks are paper checks you can purchase at a bank or credit union then carry when you travel abroad in a place of cash. Unlike cash, however, travelers checks are secured by the issuing financial institution, which means that the issuer will replace the funds if the checks are lost or stolen at any point at home or abroad.

Issuers print checks in varying denominations, such as $10, $20, or $50, and they are available in a range of currencies. Depending on where you buy traveler’s checks, you may be charged a fee in the range of 1% to 3% of the total purchase amount.^[1]

You can use travelers checks just like cash to pay merchants for goods and services, as long as they accept traveler’s checks. Typically, any change due back to you will be given in local currency. You may also be able to get the checks converted into cash in the local currency at some banks, hotels, and currency exchange offices, though you may need to pay a fee.

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How Do Traveler’s Checks Work?

Traveler’s checks operate somewhat like regular checks but are pre-paid and come with built-in fraud protection. Here’s a step-by-step explanation of how they work:

Where Can I Get a Traveler’s Check?

While traveler’s checks still exist and people still use them, they are getting increasingly hard to come by. American Express — which issued traveler’s checks for over a century — no longer offers new checks (though they will honor previously issued checks). However, some financial services companies — including Visa —- still issue traveler’s checks, which are sold through various partner banks.

If you’re interested in buying traveler’s checks, you will likely need to contact several banks and credit unions to find one that still offers them.

💡 Quick Tip: Typically, checking accounts don’t earn interest. However, some accounts do, and online banks are more likely than brick-and-mortar banks to offer you the best rates.

Pros and Cons of Traveler’s Checks

Traveler’s checks offer a mix of benefits and drawbacks. For some, they are a nostalgic or extra-safe backup option. For others, they may seem outdated compared to more modern financial tools.

Pros of Traveler’s Checks

Cons of Traveler’s Checks

Do I Need Traveler’s Checks When Going Abroad?

Generally, no. Modern travelers often find credit cards, debit cards, and mobile wallets to be more convenient, widely accepted, and cost-effective. However, there are exceptions. You might consider traveler’s checks if:

Still, for the majority of travelers, modern financial tools usually make traveler’s checks unnecessary.

4 Alternatives to Traveler’s Checks

Traveler’s checks are no longer the only secure option for carrying money while abroad. Here are four modern, practical alternatives:

1. Prepaid Debit Card

A prepaid travel card is the modern-day version of a traveler’s check. You can load the card with a set amount of money from your bank account before you travel, then use it to get local currency, shop, dine, and more while you’re abroad.

Like traveler’s checks, prepaid cards are not linked to your bank account, which prevents anybody from draining your checking account if the card gets lost or stolen — and you can’t go into debt. On the downside, these cards limit you to a pre-set spending amount. And if you lose your card, there’s no way to get your money back.

2. Credit Card

Using a credit card is a convenient and secure way to pay for goods and services while you travel. These cards come with robust fraud protections that safeguard your money if your card gets stolen or lost while overseas. And many cards also offer spending rewards, such as points, miles, or cash back. However, there may be fees involved with using your card overseas, called foreign transaction fees.

And unless it’s an emergency, you’ll likely want to avoid using your credit card for getting cash at an ATM. When you request a cash advance from a credit card, you can get hit with a fee (often 3% to 5% of the advance amount), as well as interest, which can run as high as 29%. You may also pay an ATM fee of several dollars.

3. Debit Card

Another alternative to traveler’s checks is your debit card, which you can use to get local currency at ATMs and also to make purchases while traveling. Unlike a credit card, you’re spending your own money when you pay by debit card, so you can’t run up debt.

Like a credit card, however, you may get hit with a foreign transaction fee when you pay something overseas using your debit card. You may also have to pay out-of-network ATM fees every time you withdraw cash. However, some banks have partnerships with banks in other countries that allow travelers to make fee-free withdrawals. Before you travel, it’s a good idea to check to see if your bank has this kind of arrangement.

4. Mobile Wallet

Mobile wallets like Apple Pay, Google Pay, and Samsung Wallet are becoming more accepted around the world. You can link your credit and debit cards and pay directly from your phone without needing a physical wallet. This method of payment is not only convenient, it’s also highly secure, since digital wallets use encryption and tokenization to protect your data.

Just keep in mind that not all merchants accept mobile wallets, especially in rural areas, so you may not want to rely on this as your only payment option when you travel.

💡 Quick Tip: Want a simple way to save more everyday? When you turn on Roundups, all of your debit card purchases are automatically rounded up to the next dollar and deposited into your online savings account.

How to Keep Your Money Safe While Traveling

Regardless of your preferred payment method, keeping your money safe while traveling is essential. Here are a few tips:

Recommended: How to Keep Your Bank Account Safe Online

What Can I Do With Old Traveler’s Checks?

If you still have old traveler’s checks from past trips, don’t throw them away — they may still be redeemable. Here’s what you can do:

Keep in mind that in order to redeem old traveler’s checks, you’ll need to provide identification and possibly documentation proving you were the original purchaser.

The Takeaway

Traveler’s checks were once the gold standard of secure travel funds, but the rise of digital banking has made them largely obsolete. Still, they retain some usefulness as a secure backup for international travelers, especially in less developed regions or for those who prefer not to rely on digital methods.

For most modern travelers, credit cards, debit cards, prepaid cards, and mobile wallets offer more convenience, better exchange rates, and broad acceptance. However, understanding traveler’s checks — and knowing how to use or redeem them — can still come in handy.

Ultimately, the best approach is a balanced one: carry multiple forms of payment, stay aware of local customs and banking norms, and prioritize security. Whether you’re heading off the beaten path or to a major city, having a thoughtful plan for managing your money can make your travels smoother, safer, and more enjoyable.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

FAQ

How does a traveler’s check work?

A traveler’s check is a prepaid, fixed-amount paper check used as a secure alternative to cash while traveling. You purchase it from a financial institution, sign it when issued, and sign it again when spending it or cashing it, allowing merchants or banks to verify your identity. If lost or stolen, traveler’s checks can usually be replaced quickly. However, traveler’s checks are not as widely issued and accepted as they once were. They have largely been replaced by prepaid debit cards and credit cards.

Why are traveler’s checks not used anymore?

Traveler’s checks have largely fallen out of favor due to the convenience and widespread use of credit cards, debit cards, and digital wallets, which are accepted almost everywhere and offer strong fraud protection. ATMs are now globally accessible, making it easy to withdraw local currency as needed. Additionally, it’s hard to find banks that still issue traveler’s checks, and many merchants no longer accept them as payment.

Can you cash traveler’s checks?

Yes, you can still cash traveler’s checks, though it might take some effort. Some major banks will cash them for account holders, especially if they issued the checks. Some currency exchange offices and hotels may also accept them. You’ll need valid identification, and you’ll usually sign the check in front of the cashier. However, because these checks are less common now, it’s best to call ahead and confirm if a location will accept or cash them.

Do financial institutions still carry traveler’s checks?

Some financial institutions still offer traveler’s checks, but their availability is limited. American Express no longer issues travelers checks. However, Visa still offers them through participating banks. You may need to call around to find a bank in your area that offers these checks. Those that do may also require advance notice or only provide them to account holders. As the travel industry shifts toward digital and card-based payment methods, traveler’s checks are now less commonly sold or promoted.

What can I do with old traveler’s checks?

If you have old traveler’s checks, you can generally still cash or deposit them, as they typically don’t expire. Visit a bank — preferably one that issued the checks or one with international banking services — and present valid identification. You can also contact the issuing company (e.g., American Express) for assistance or to process a refund. You may be able to deposit them into your bank account (though check with your bank first). They retain their original value if unused.

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Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

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SOBNK-Q225-112

A typical California resident has a FICO® credit score of 722, which is slightly higher than the national average credit score of 715. The state’s average VantageScore is also better than the U.S.: 712 vs. 705.

A good credit score could open more financial doors for you, such as accessing more competitive interest rates for loans. By understanding the average credit score in California, you can better see how your credit profile stacks up against others in your state and identify areas of improvements.

What Is a Credit Score?

Think of a credit score like a resume but for your credit behavior. This three-digit number ranges from 300 to 850 and is based on information gathered from your credit history. Lenders often use it to determine your future credit behavior, such as whether you’re more likely to pay loans on time.

In general, the higher your score, the more creditworthy you’ll likely appear to lenders — and the better your chances are to receive favorable rates and terms.

Recommended: What Is the Starting Credit Score?

What Is the Average Credit Score in California?

If you live in California and want to see how your credit score compares to fellow residents, it helps to look at two popular credit scoring models: FICO and VantageScore®.

As discussed, Californians have an average FICO Score of 722 and an average VantageScore of 712. These numbers are part of a larger positive trend in the state, according to the California Policy Lab, a research institute at the University of California. A 2024 analysis reveals that the average credit score in the state has been increasing steadily since 2013.

California Policy Lab also looked at how credit scores differed within the state based on a consumer’s location. As of December 2024, residents in the Bay area had the highest average credit score in the state, at 732. Meanwhile, people living in the San Joaquin Valley had the lowest score, at 688.

Scores also varied by age. At 743, Boomers (age 61-79) have the highest average score in California. The Greatest Generation (98+) had the lowest average credit score —663.

What Is the Average Credit Score in the U.S.?

As we mentioned above, Experian data shows the average FICO in the U.S. is 715 and the average VantageScore is 705. By comparison, the average FICO Score in California is 722 and the average VantageScore is 712.

What Is a Good Credit Score?

A “good” credit score depends on which scoring model you use. FICO considers a good score to fall between 670 and 730. A good VantageScore credit score is between 661 to 715. In general, those with a minimum credit score of 670 have a “good” credit score.

Factors Influencing the Average Credit Score

There are certain factors that affect your credit score, and all of them have to do with how you manage your credit accounts.

FICO and VantageScore consider the following when determining your score:

•   Payment history: Lenders want to know you’ll pay back what you owe in full and on time, so this factor ranks as one of the most influential factors that determine your credit score. If you need help making on-time payments, consider enlisting the help of a spending app.

•   Credit utilization/amounts owed: Credit utilization is the percentage of the available credit limit that you’re using. The higher the percentage, the more it could negatively affect your score.

•   Length of credit history: Having a longer credit history can offer scoring models more insight into how you use credit, though it’s not hugely influential when calculating a credit score.

•   Credit mix: Scoring models will take into account how well you manage different types of loans, such as a mortgage, credit cards, and personal loans.

•   New credit: When you apply for a new account, the lender will likely perform a hard inquiry, which can temporarily lower your credit score by a few points. Opening multiple new accounts in a short period of time could affect your score and may signal financial strain to lenders.

Why Do I Have More Than One Credit Score?

Every consumer has more than one credit score, and there are a few reasons for this. For starters, the information lenders provide to each of the three main credit reporting agencies — Equifax, Experian, and TransUnion — may vary slightly. A lender may choose to report data to one, two, or all three agencies, for example.

There are also various scoring models that a lender may use, including FICO and VantageScore, and each may weigh certain credit behaviors differently. One model might put greater weight on credit utilization or length of credit history, for instance.

Timing also plays a role. Generally, credit scores update every 30 to 45 days, and your score can change as new information becomes available.

Regardless of those factors, it’s important to understand what your credit score is so that you can use the information to build your credit and make progress toward your financial goals.

Recommended: FICO Score vs. Credit Score

Where Can I Check My Credit Scores?

Credit score monitoring is a smart thing for any consumer to do but can be particularly helpful if you’re getting ready to apply for a loan. You’ll not only see what information lenders can access, you can also use your score to gauge what loans you may qualify for.

The good news is, there are plenty of ways you can check your credit score without paying — whether you live in California or any other state. Banks often provide this information to their customers for free, as do credit card issuers. If you’re working with a credit counselor, they may be able to provide you with your score.

The Takeaway

The average credit score in California is 722 for FICO and 712 for VantageScore. Both scores are higher than the national average, and both are considered good. If you want to build your score, consider paying bills on time, keeping credit utilization low, and responsibly managing a mix of credit.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

FAQ

What is a good credit score to buy a car?

There’s no minimum credit score required when you’re applying for a car loan. That said, the higher your score, the more likely you are to receive a lower interest rate and more favorable terms.

What is a good credit score to buy a house?

The minimum credit score you need for a mortgage will depend on the type of loan you’re pursuing. For example, conventional loans and VA loans typically require borrowers to have a credit score of at least 620, though some lenders prefer to see a minimum credit score of 640. FHA loans, on the other hand, may be within reach for home buyers who have a credit score as low as 500, though they’ll be required to come up with a 10% down payment.

What credit score do most Americans have?

According to Experian, the average credit score in the U.S. is 715, which is generally considered a good score.

How rare is a 740 credit score?

A credit score of 740 isn’t that rare. According to Experian, 28% of Americans have a credit score of 740 or higher.

How rare is an 800 credit score?

Experian data found that some 22% of Americans have a credit score of 800 or higher. So, an 800 credit score isn’t uncommon.

How common is a 700 credit score?

More than one in five Americans (21%) have a credit score that falls between 670 and 739, which is considered “good.”

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SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

*Terms and conditions apply. This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed towards active SoFi accounts, such as your SoFi Checking or Savings account, subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

SORL-Q225-018

Investing in individual bonds can be complicated, but exchange-traded funds (ETFs) that invest in bonds — or bond ETFs — can provide a more straightforward way to invest in fixed-income securities. Investors may associate ETFs with stocks, thanks to the popular ETFs that track stock indices like the S&P 500. ETFs also happen to trade on stock exchanges, like the New York Stock Exchange.

Bond ETFs work similarly. Though the ETF holds bonds and not stocks, it trades on a stock exchange. Said another way, a bond ETF is a bundle of bonds that an investor can trade like a stock. Bond ETFs make it possible for investors to buy a diversified set of bonds, without the time and effort it would take to build a portfolio of individual bonds.

ETF 101: Reviewing the Basics

Before getting into the specifics of bond ETFs, it will be helpful to understand ETFs and bonds separately. Let’s begin with ETFs.

An investment fund provides a way to pool money with other investors so that money can then be spread across many different investments (sometimes referred to as a “basket” of investments).

For most retail investors, it would be too costly to individually purchase 500 individual stocks or 1,000 individual bonds. But such a thing becomes possible when doing it alongside thousands of other investors. Though different vehicles, mutual funds and ETFs provide investors with an incredible opportunity to diversify their investments.

For retail investors, investment funds come in two major varieties: mutual funds and exchange-traded funds. Mutual funds and ETFs are constructed differently — ETFs were built to trade on an exchange, as the name implies — but both can be useful tools in gaining broad diversification.

Whether investors will choose a mutual fund or ETF will likely depend on their preference, and context. For example, someone using a workplace retirement plan may only have access to mutual funds, so that’s what they use.

Someone who is investing independently may choose ETFs since ETFs tend to have lower fees than mutual funds.

Whether an investor is using a mutual fund or an ETF, what’s most important is what’s held inside that fund. Think of an ETF as a basket that holds an array of securities, like stocks or bonds.

Most ETFs will hold just one type of security — only stocks or only bonds, for example. A bond ETF could be broad, or it could contain a narrower sliver of the bond market, like corporate bonds, green bonds, or short-term treasury bonds.

What Is a Bond?

Effectively, a bond is a loan to an organization: i.e., a company, government, or other entity. Investors loan the entity their money, and then the entity pays interest on the amount of that loan.

Bonds are different from stocks, which offer investors the opportunity to buy shares of ownership in a company in a company or entity.

There are many types of bonds. Treasuries are loans to the U.S. government. Municipal bonds are loans to a state or local government. Companies sometimes issue bonds in order to raise money. These entities are borrowing money from investors and issuing IOUs in the form of bonds.

How Bonds Work

When investors buy a bond, they are agreeing to the rate of interest and other terms set by the bond. Because bonds pay a fixed rate of interest, bonds are sometimes referred to as fixed-income investments.

Bonds typically make interest payments, sometimes referred to as coupon payments, twice annually.

Example of a Bond

Let’s say an investor buys a Company X bond for $10,000 that pays a 4% rate of interest over 20 years. The bond earns $400 every year, earning the investor a total of $8,000 over the 20-year period. At the end of the period, the $10,000 “principal” investment is returned. As long as the investor holds the bond for the full 20 years, there should be no surprises.

Because bonds pay a fixed rate of return, their earnings potential is largely predictable. But there is limited upside on what can be earned on a bond. For this reason, bonds are considered to be a safer, less volatile complement to stock holdings, which have a higher potential for returns over time.

Types of Bonds

Bonds are issued by different entities and are often categorized by the issuer. There are four categories of bonds available to investors.

•   Treasury bonds: Bonds issued by the U.S. government.

•   Municipal bonds: Bonds issued by local governments or government agencies.

•   Corporate bonds: Bonds issued by a public corporation.

•   Mortgage and asset-backed bonds: Bonds that pass through the interest paid on a bundle of debts, such as a bundle of mortgages, student loans, car loans, or other financial assets.

There are also many subtypes within these broad categories.

When it comes to risk, the bond market comprises a wide range. Corporate, municipal, and asset-backed bonds are generally considered to be higher-risk than treasury bonds.

Whereas a business or even a municipal government could potentially “default” on a loan, it is highly unlikely that the U.S. government would go bankrupt. (As yet, the U.S. government has never defaulted on a treasury bond.)

Because they are considered low risk, U.S. treasury bonds typically pay less interest than the other bond types. This is an important trade-off to understand. Higher-risk investments should pay a higher rate of interest in order to compensate the investor for taking on that additional risk.

This is why it is possible to see bonds with high rates of interest issued by unstable governments or by highly speculative companies. These are often referred to simply as high-yield bonds or junk bonds.

Bonds can also vary by their maturity dates. It is possible to purchase bonds with a wide range of timelines, ranging from the very short (a few days) to the very long (30 years). Although it depends on the current state of interest rates, long-term bonds tend to pay more than short-term bonds. This should make intuitive sense; investors want to be compensated for locking their money up for longer periods.

Benefits of Bond ETFs

While bonds offer certain benefits to investors, including relatively low risk and predictable income, these instruments are complex. Owning and managing a portfolio of bonds requires experience and sophistication. This is where bond ETFs come in. In some ways, bond ETFs give retail investors easier access to the bond market.

Bond ETFs Can Be Purchased in Small Dollar Amounts

For some bonds, the starting price is $1,000. This can be prohibitive for small investors who don’t have $1,000 to start building their bond portfolio, let alone a diversified one.

Generally, ETFs are sold by the share, and the cost of one share varies by ETF. Some trading platforms allow for the purchase of partial shares, which allows investors to get started with as little as $1.

Bond ETFs Can Provide Diversification

It is possible to buy into a fund of hundreds or thousands of bonds using a bond ETF. This type of portfolio diversification would be otherwise impossible to achieve for small investors trying to build a bond portfolio on their own. ETFs make diversification a possibility, even at very small dollar amounts.

Bond ETFs are Typically Low-Cost

ETFs, by their nature, are low-cost. Because they are typically passive funds by style, the management fee embedded within the fund — called the expense ratio — is typically quite low. Compare this to an actively managed mutual fund of bonds, where the expense ratios can top 1%.

There’s another fee that investors will want to be aware of, called a trading cost or transaction fee. This is the cost of buying and selling ETFs (and stocks). These fees can be quite prohibitive for retail investors. Luckily, there are ways to buy ETFs without paying any trading or transaction fees.

Bond ETFs are Liquid

Individual bonds are not always easy to buy and sell. Said another way, they are not particularly liquid. Bonds do not trade on an open exchange, like stocks and ETFs. It is likely that an investor would need to involve a professional to broker the transaction.

ETFs, on the other hand, are very easy to sell. Most banks and trading platforms allow investors to do it themselves, online. This way, an investment can be sold quickly if needed.


💡 Quick Tip: Distributing your money across a range of assets — also known as diversification — can be beneficial for long-term investors. When you put your eggs in many baskets, it may be beneficial if a single asset class goes down.

Downsides of Bond ETFs

Bond ETFs do have their downsides, however.

Bond ETFs reveal underlying price changes in the bonds, which some investors may find disconcerting. Because yes, it is possible for bonds, and a bond ETF, to lose value.

When holding an individual bond or a portfolio of bonds, an investor is not provided minute-by-minute updates of the market value of that investment. In this way, a bond is like a house. There is no ticker sitting above anyone’s house that tells them the value of that property at any given time.

This is not the case with a bond ETF, where price changes can be felt in near real time. It will be important that investors are prepared for this. It is generally not wise to make a decision about long-term investments based on recent price gyrations, not just with stocks but with bonds, too.

The Takeaway

The first step is to research bond ETFs, as there are many kinds. Bond ETFs can be broad and cover a wide sample of the bond market, or they can be narrower. For example, it is possible to buy a long-term treasury bond ETF or a bond ETF that only holds certain municipal bonds.

Ready to invest in your goals? It’s easy to get started when you open an investment account with SoFi Invest. You can invest in stocks, exchange-traded funds (ETFs), mutual funds, alternative funds, and more. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).

FAQ

What is a bond ETF?

A bond ETF is an exchange-traded fund that invests in, or is composed of, bonds, rather than stocks or other types of securities.

What are some examples of types of bonds?

There are numerous types of bonds, and some examples include Treasury bonds (or T-bills), municipal bonds, corporate bonds, and mortgage or asset-backed bonds.

What are some potential advantages to bond ETFs?

Potential advantages of bond ETFs include the fact that they can be purchased in small dollar amounts, they can help diversify a portfolio, and are relatively liquid. That doesn’t mean that there aren’t drawbacks, however.