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Travellers’ cheques – what you need to know

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

You would be forgiven for thinking travellers’ cheques have been consigned to history, much like the old-fashioned cheque book. But while they might have largely been superseded by more flexible payment methods, they could still come in handy for some travellers.

A travellers' cheque next to a passport and model plane


What are travellers’ cheques?

Put simply, travellers’ cheques are pre-written cheques for a fixed amount. You can exchange them for cash while you are away or use them to pay for items directly.

You can choose to have them in sterling or in the currency of the country you are 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 hand corner. You also need to make a note of their serial number.

This will provide your proof of purchase and will come in handy should they need replacing at some point.

You’ll need to sign your travellers’ cheques again when you spend them. Whoever is accepting the travellers’ cheques will need to ensure the two signatures match to verify that you are their 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

Although travellers’ cheques may now seem a little old-fashioned, the main reason people keep using them is that they are a safe and secure way of carrying money overseas.

If you do lose them or they are stolen, they are easy to replace. You just need to make sure you have a note of the serial numbers and store those details away from the cheques.

They also don’t have any expiry dates, so if you don’t spend them you can save them for your next trip or take them back to the place you bought them and request a refund.


Disadvantages of travellers’ cheques

The main downside of travellers’ cheques is that they can be a bit of a faff.

While you might be able to spend them like cash in some places, in other - less touristy locations - you may have to make a trip to the bank or bureau de change and queue up to get your cash. 

There are also costs associated with travellers’ cheques. You may have to pay a commission and a handling fee. You could also be charged a fee when you cash them in.

Costs are likely to be higher if you buy sterling travellers’ cheques and convert to local currency at your destination.


Where can I buy travellers’ cheques?

You can buy travellers’ cheques in the UK from banks, the Post Office, Bureaux De Change as well as travel agents.


Where can I use travellers’ cheques?

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

In tourist destinations and larger cities you might be able to spend them like cash in hotels, restaurants and shops and receive your change in local currency. In more rural locations you might struggle.

Retailers in the US also often accept travellers cheques.

If you cannot spend them like cash you will 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.


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 won’t be left out of pocket if they are lost or stolen.

You’ll need to contact the customer services centre for the company that issued the travellers’ cheques and provide them with the relevant serial numbers. You’ll then be able to get a refund or replacements.

Again this is why it is 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 will depend on two things:

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

If you are travelling to somewhere like the US, or to a popular tourist destination, where they can easily be spent and exchanged and you worry about carrying cash or credit cards, they could be a good option.

However, if you are confident carrying around other payment methods, like credit cards, debit cards and prepaid cards, you might find they give you an administrative headache, particularly if you aren’t in a big city or tourist hotspot.


What are the alternatives to travellers’ cheques?

If you don’t fancy carrying around lots of cash, or a fistful of travellers’ cheques there are plenty of alternatives.

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

When you spend on a credit card overseas, you also have the added benefit of Section 75 of the Consumer Credit Act. This means that any purchase you make on it (from £100-£30,000) is protected by your credit card company.

Credit and debit cards may be less secure than travellers’ cheques but they do make it a lot easier to spend your holiday money.

Another popular option is to use prepaid cards. Here you load money from your bank account onto a card that you can then use to pay for goods and services like any other card in your wallet.

It’s also worth remembering that if you do 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.

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