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What Are Traveler’s Checks and How Do They Work?

By Sheryl Nance-Nash · September 20, 2021 · 5 minute read

We’re here to help! First and foremost, SoFi Learn strives to be a beneficial resource to you as you navigate your financial journey. Read more We develop content that covers a variety of financial topics. Sometimes, that content may include information about products, features, or services that SoFi does not provide. We aim to break down complicated concepts, loop you in on the latest trends, and keep you up-to-date on the stuff you can use to help get your money right. Read less

What Are Traveler’s Checks and How Do They Work?

Traveler’s checks were once a necessity for keeping your money safe when traveling internationally. But with digital payment options and ATMs located around the world, do we really need traveler’s checks anymore?

While you might not want to travel solely with traveler’s checks these days, having a few as a backup can be useful.

The main advantage of traveler’s checks is that they function like cash–you can use them to pay for goods and services at any business that accepts traveler’s checks. Unlike cash, however, if these checks get lost or stolen, you can get your money back.

You can also use traveler’s checks to get local currency at many banks and hotels while traveling.

However, these days traveler’s checks are somewhat outmoded and have largely been replaced by plastic and electronic payments.

Read on to learn how these checks work, where to get them, as well as their pros and cons.

What Is a Traveler’s Check?

Traveler’s checks are paper documents that can be used as a traditional paper check and also like cash. They are intended to aid tourists and are typically used by people on vacation in foreign countries.

Issuers print checks in varying denominations, such as $10, $20, or $50, and they are available in a range of currencies.

You can use these 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 can also get the checks converted into cash in the local currency at many banks, hotels, and foreign exchange offices.

If traveler’s checks get lost or stolen, the issuer will replace the checks or give you a refund.

Recommended: Where to Cash a Check Without Paying a Fee

How Do Traveler’s Checks Work?

Traveler’s checks are issued by a bank or other financial institution. Right after you purchase your checks, you sign each one. When you are ready to use the check, you fill in the payee and date, and then sign the check again.

For the second signature, the person or business you’re paying must be present to watch you sign. The two signatures should match. This is a deterrent to would-be criminals who for that reason may think twice about stealing them.

Though traveler’s checks function like cash, they also are similar to paper checks in that each check has a unique check number. If that check is lost or stolen, the issuer cancels it and issues you a new one.

Where Can I Get a Traveler’s Check?

You can still buy traveler’s checks in the U.S. and other countries. In the U.S, companies that still issue travel checks include American Express, Visa, and AAA.

You can also purchase traveler’s checks online from the American Express website, but you will need to be registered with an account. In addition, Visa offers traveler’s checks at Citibank locations nationwide, as well as at several other banks.

You may also be able to get traveler’s checks from your local bank. If your bank offers them, you may be able to get them for free. If you are buying them elsewhere, you will likely pay a 1% to 2% purchase fee.

Pros and Cons of Traveler’s Checks

Traveler’s checks are handy for tourists who do not want to risk losing their cash or having it stolen while abroad. But they come with a few disadvantages as well. Here’s a look at the pros and cons.

Pros

They keep your money safe. If something should happen to your traveler’s checks, they can be quickly replaced, typically within 24 hours.

They don’t expire. If you bought them and end up not taking your trip, you can use them, or redeem them, at any time in the future.

They protect your identity. Traveler’s checks are not linked to your bank account or line of credit and do not contain personally identifiable information, thus eliminating risk of identity theft.

Cons

They aren’t as widely accepted as they once were. You could find yourself not able to spend them as freely as you like. Outside of major tourist regions, you may find that few shops or hotels accept traveler’s checks as payment.

They can be hard to get. There are a limited number of issuers today.

You may have to pay a fee. Unless you’re getting them from the financial institution where you have an account, you’ll likely have to pay a fee to purchase a traveler’s check.

Do I Need Traveler’s Checks When Going Abroad?

You certainly don’t need them, but they may come in handy–depending on where you’re traveling.

Before purchasing traveler’s checks, it can be a good idea to research how widely this form of payment is accepted in the city or region you are planning to visit. You can simply Google something like, “Where can I spend traveler’s checks in Paris” to get this information.

As an alternative, you might consider going with a prepaid travel card, which is the modern-day version of a traveler’s check. You can load the card with money from your bank account and then use it like a debit card at an ATM (to get local currency), or a credit card at stores and restaurants.

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.

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. However, you may want to watch out for fees, which may include both an out-of-network ATM fee, as well as an international ATM fee, for every withdrawal you make.

Your credit card is another option. These cards can offer you fraud protection. 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 perform a cash advance from a credit card, you can get hit with a fee (around $10 or more), as well as interest, which can run around 25%.

Recommended: Ways to Be a Frugal Traveler

What Can I Do With Old Traveler’s Checks?

Because traveler’s checks don’t expire, those that you have tucked away in a drawer can be used for your next adventure.

You can also redeem traveler’s checks, no matter how old. Some banks allow account holders to deposit their traveler’s checks (including foreign currency traveler’s checks) into their bank account. It’s a good idea to check with your bank first, and also find out if they will charge a fee for clearing the checks.

You can redeem your unused American Express Travelers Cheques online at the company’s website .

Recommended: Here’s What You Can Do with Leftover Foreign Currency

The Takeaway

Traveler’s checks are a form of payment issued by financial institutions such as American Express. These checks function like cash but are more secure since you can get your money back if the checks are lost or stolen.

While traveler’s checks can be handy for tourists who do not want to risk losing their cash or having it stolen while abroad, they are not as widely issued or accepted as they used to be.

Today’s travelers may prefer to use a prepaid debit card, which functions in a similar way to a traveler’s check, and/or their credit cards to pay for expenses while traveling overseas.

Love to travel? If you open a SoFi Money® cash management account, you’ll be able to withdraw cash free of charge at 55,000+ ATMs worldwide.

Learn how SoFi Money makes it easy (and free) for travelers to access their cash.

Photo credit: iStock/AndreyPopov


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