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Travellers’ cheques – what you need to know

Traveller’s cheques might be less popular now, but they’re still worth considering if you want a secure way to spend money abroad.

You'd be forgiven for thinking travellers’ cheques have been mostly forgotten, much like the old-fashioned chequebook. 

But while they may have been largely replaced by more flexible payment methods, they could still be useful for some travellers.

A travellers' cheque next to a passport and model plane

What are travellers’ cheques?

Travellers’ cheques are pre-written cheques for a fixed amount. You can exchange them for cash while you're abroad or use them to pay for items directly.

You can choose to have them in pound sterling or in the currency of the country you're travelling to.

How do travellers’ cheques work?

As soon as you buy travellers’ cheques you need to sign them. This is usually in the top-left corner. You also need to make a note of their serial number.

This provides your proof of purchase and can be useful should they need replacing.

But you need to sign your travellers’ cheques again when you spend them. 

Whoever's accepting the cheques needs to ensure the 2 signatures match to verify you're the true owner.

You might be able to spend travellers’ cheques directly in hotels, restaurants and shops. Or you can exchange them for cash at a bank or bureau de change.

Benefits of travellers’ cheques

Travellers’ cheques may appear a little old-fashioned now. But there are advantages to using them:

  • A safe form of payment: The main reason people keep using travellers' cheques is that they're a safe and secure way of carrying money overseas.
  • Easy to replace: If you do lose them or they're stolen, they're easy to replace. You just need to make sure you have a note of the serial numbers and store the details away from the cheques.
  • No expiry date: They don’t have any expiry dates. So, if you don’t spend them, you can save them for your next trip or request a refund.

Disadvantages of travellers’ cheques

As with most things, there are also disadvantages to using travellers' cheques:

  • Inconvenient: In some locations, you can spend the cheques like cash. In others, you may have to visit the bank or bureau de change to cash them in first.
  • Additional costs: You may have to pay a commission and a handling fee. You could also be charged a fee when you cash them in.
  • Less popular: Due to a decrease in popularity, they aren't as widely used as they once were, meaning fewer locations accept them. 

Where can I buy travellers’ cheques in the UK?

You can buy travellers’ cheques in the UK from:

  • Banks
  • The Post Office
  • Foreign currency exchange - Bureau de Change
  • Some travel agents

Where can I use travellers’ cheques?

Where you can spend your travellers’ cheques depends on where you're travelling.

In tourist destinations and larger cities, you might be able to spend them like cash in hotels, restaurants and shops. Your change is then in local currency. Some US retailers still accept travellers' cheques, for example.

In more rural locations where travellers' cheques aren't as popular, your spending options might be more limited.

If you can't spend them like cash, you need to exchange them for local currency in a bank or bureau de change.

You can find places to exchange American Express travellers’ cheques with this tool.

Do travellers' cheques expire?

No, travellers' cheques don't expire. 

If you don't spend them, you can either wait to use them on your next trip, or you can get a refund. 

It's also possible to refund the travellers' cheques for someone who died. But you must be the next of kin or a beneficiary. 

What do I do if my travellers' cheques are lost or stolen?

Much of the remaining appeal for travellers' cheques comes from the fact that you may not lose the money if they're lost or stolen.

If you lose your travellers' cheques or they're stolen, you need to contact the customer services centre for the company that issued them. You then need to provide the relevant serial numbers before you can get a refund or replacement.

This is why it's vital to keep a note of the serial numbers on all your travellers’ cheques and store them separately.

Are travellers’ cheques worth it?

Whether or not travellers’ cheques are worth it for you depends on 2 things:

  • Your need for safety and security - travellers’ cheques are easy to replace if lost or stolen and can't be used without your signature
  • How easy they are to spend or exchange at your destination

They could be a good option if you're travelling to somewhere like the US where you can spend and exchange them easily. Knowing you don't have to worry about carrying cash or credit cards can be reassuring.

But, if you're confident carrying around other payment methods - like credit cards, debit cards and prepaid cards - you might find travellers' cheques are too complicated. 

How to get a good deal on travellers' cheques

As travellers' cheques are offered at different exchange rates to cash, the costs could be higher when you convert them. This is why it's important you shop around before buying and consider which currency you need. 

If you buy pound sterling travellers' cheques, you may have to pay a 1% commission. But when you buy travellers' cheques in a foreign currency, you may not have to pay a commission at all. 

If you're travelling to a country that doesn't accept sterling, you could save more by buying the travellers' cheques in the local currency. 

But, before cashing travellers' cheques, consider the impact it could have on your budget. If you think you'll encounter high exchange rates, the cheaper option might be to use debit or credit cards instead. 

What are the alternatives to travellers’ cheques?

If you don’t want to carry cash or travellers’ cheques, there are several alternatives to help you spend money abroad.

Credit and debit cards

Credit and debit cards may be less secure than travellers’ cheques but they're easier to use.

The cost of using debit cards and credit cards overseas has fallen since travellers’ cheques were popular. In fact, you can now get travel credit cards that are specifically designed for use abroad, with lower fees.

When you spend on a credit card overseas, you also have added protection from Section 75 of the Consumer Credit Act. With this, anything you buy between £100 and £30,000 is protected by your credit card company.

Prepaid cards

Another popular option is to use prepaid cards. You can load money from your bank account onto a prepaid card and then use it to pay for goods and services.

If you lose or have cash stolen from you on holiday, you may be able to claim for the loss with your travel insurance policy. Check the terms of your plan but you can typically claim for £300, rising to £500 with some insurers.

Mobile wallets

You can also make payments through your mobile phone.

Depending on the device and app you use, it can be secure when used correctly. It also ensures you're not carrying loose cash.

But know that not all retailers or merchants accept this form of payment, especially small businesses, so it's vital you do your research.

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