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Travellers’ cheques – what you need to know

Travellers' cheques, while declining in use, are still available today. But how do they work, and what alternatives are available?

What are travellers' cheques?

Travellers' cheques are pre-printed, fixed-amount cheques, designed to allow payments from one person to another across currencies.

Usually issued by banks, they work as a guarantee of payment. This means the cheque can never ‘bounce’ when you use it, because you’ve already paid for it.

They we’re generally used by travellers instead of cash, because of the added security they can offer.

If a travellers’ cheque is lost or stolen, it can be cancelled and replaced by whoever issued it, which is handy for vulnerable tourists.

But their use has been declining since the 90s, as alternatives like credit and debit cards became more widely available, easier to use, and often cheaper.

How do travellers' cheques work?

You buy travellers' cheques from most banks and post offices, and they'll usually have a fixed value and a unique serial number.

You'll also get a receipt that has the serial numbers of all the cheques on it. If they're stolen or lost, this'll help you get them cancelled and replaced.

Where accepted, the cheque should be treated the same as local currency by retailers. Any change you get should be in regular, local money.

The downside is that you’ll often have to pay a commission fee to get them, to use them and to cash them in – which is part of the reason for their decline.

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Where can I get travellers' cheques?

Travellers' cheques are usually sold by banks and financial specialists.

But declining demand and security issues around them have led to a steady drop in the number of banks and businesses accepting them worldwide, making them less and less useful.

American Express are still offering the most widely-accepted travellers’ cheques, in six different currencies.

Check with your bank if they are able to issue travellers cheques, but watch out for the increasing difficulty you’ll have finding retailers that’ll accept them.

Where can I use travellers' cheques?

They are fast becoming a relic, but there still are a few places that’ll accept them.

American express, the largest issuer of travellers’ cheques, claims they can be used at thousands of places worldwide.

But there's no doubt this is decreasing. Try using their useful search tool to help you find accepting locations around the world.

So what are the alternatives?

The truth is, travellers’ cheques are simply no longer the easiest and most secure way to pay abroad.

Many choose to use their regular credit or debit card to pay for goods while on holiday, but these often come with hefty additional charges.

The alternative is to take out a new account or credit card, specifically for using abroad. You can compare charges and rates, and find the card that works best for you.

Prepaid cards are the modern equivalent to travellers’ cheques.

Pre-loaded with foreign currency, they can help limit additional currency exchange charges, and are worth considering.

Usage fees vary, but the cheapest prepaid cards shouldn’t charge any more than the best-value debit or credit cards.