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Pros And Cons Of Using Travelers Checks When Traveling Abroad

In an earlier article, we looked at some of the advantages and disadvantages of using cash when traveling abroad. Although paper-based money is accepted everywhere, it loses value every time you exchange it; and cash is also easy to steal and lose.

In a follow-up article, we also looked at the pros and cons of using credit cards.  Many international merchants don't accept plastic at all, and those that do usually only take EMV chip cards. However, credit cards have the advantage of fraud protection and liability coverage.

In between these two extremes are travelers checks (a.k.a. cheques). Although not ideal in all circumstances, travelers checks offer important benefits for the jet-setting crowd.

Let's look at some of the pros and cons of using this payment method when traveling abroad.

When Using Travelers Checks Abroad is a Good Idea

Arguably, the main benefit of travelers checks is that they are easy to cancel or replace. If your wallet gets stolen, you can receive replacement checks — provided that you still have the serial numbers of the missing ones.

This is in sharp contrast to cash (which is impossible to “cancel”) and credit cards (which are difficult to “replace” when overseas).

Another advantage is that travelers checks are indirectly accepted everywhere.  Simply convert your check into cash, and you now have enough local currency to buy whatever you need.

Travelers checks also carry lower fees than credit cards do — but be prepared to pay slightly higher exchange rates. 

When Using Travelers Checks Abroad is a Bad Idea

One of the main drawbacks of travelers checks is the hassle involved with acquiring and exchanging each check. This might not seem like a big deal as you’re preparing for your trip, but imagine landing in a foreign city after a long flight. It's late at night, all the kiosks are closed, and there's no way to convert your checks into usable money.

Even if you land in the daytime, travelers checks aren't accepted everywhere.  Many smaller towns don't have services that can convert checks into money.

Another minor hassle is that you have to keep track of all of the serial numbers for cancellations and replacements — and it's important you keep those numbers separate from your wallet. Again, this isn't a big deal, but not every holiday traveler wants to take on this accounting and bookkeeping responsibility.

Travelers checks typically carry less competitive exchange rates than what credit cards offer. It can be difficult to take out the "right” amount for each stop. This is why you might want to request travelers checks in the smallest denominations possible.

Are Travelers Checks Right for Your Trip?

Although somewhat antiquated, travelers checks do have a certain romantic charm about them. They are not terribly practical — especially at a time when ATMs and credit card terminals are so popular worldwide. However, travelers checks can provide additional insurance against the loss or theft of other payment types.

Besides, anything you don't use can be exchanged to dollars at your local bank when you get back home. There's no reason not to take a few travelers checks with you on your next trip.

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