What Are Traveller’s Cheques and How Do They Work?
You’ve probably heard of traveller’s cheques but may not have used them. A traveller’s cheque is among the many cashless methods of paying for services or goods. However, traveller’s cheques have been losing their popularity since the onset of credit and debit cards.
The good news is that traveller’s cheques are still functional and can save you from the stress and risk of carrying a huge chunk of money while travelling.
Here, we will answer the following questions:
- What are traveller’s cheques?
- How do they work?
- What are the benefits of traveller’s cheques?
- Can traveller’s cheques be a hassle?
- What are alternatives to traveller’s cheques?
Let’s get started.
What are Traveller’s Cheques?
A traveller’s cheque is a printed cheque that allows payment from one person to another and across currencies. So, travellers get the cheque before they travel to exchange it with the local currency after getting to their destination.
You can easily get traveller’s cheques in Canada from financial institutions like American Express or Visa. Also, some local banks offer traveller’s cheques, but most of them scrapped it a long time ago.
How Do Traveller’s Cheques Work?
Traveller’s cheques do not bounce since you pay upfront for a specific amount that you wish to spend. The cheque will have a fixed value and a unique serial number.
Once you receive your traveller’s cheque, you should be conversant with how to use it. So, you should follow the issuer’s instructions and sign the traveller’s cheque upon receipt.
When making purchases, countersign the cheque in the presence of the receiver; the recipient should compare the signatures and confirm that they match. Any change is returned in the local currency since the traveller’s cheque is accepted at the same exchange rate as a cash payment.
However, you must enquire from the recipient if they accept traveller’s cheques as a means of payment before making any purchases. While the traveller’s cheques still work, some institutions and persons refer to them as outdated and do not accept them.You can still make the purchases in such cases, but you need to deposit the traveller’s cheque and receive cash in the local currency. Also, do your research ahead of your trip. Ensure that you can easily access services via your traveller’s cheque before purchasing them.
Most importantly, keep the details of your traveller’s cheque safe. If you lose your traveller’s cheque, you need to provide proof of purchase and the unique serial number to get a refund. Also, contact your cheque issuer immediately after losing your traveller’s cheque.
The traveller’s cheques do not expire. Therefore, you can keep them safe and use them in the future. Alternatively, you can deposit them in your bank account once you get home.
Benefits of Traveller’s Cheques
Here are the various advantages of traveller’s cheques.
- Safety: Traveller’s cheques are safe and can allow you to carry a large amount of money while travelling.
- Refunds are possible: With traveller’s cheques, you can get a refund after you lose and report the issue to your issuer. Also, you can deposit your traveller cheque at your bank once you get home.
- Does not expire: Your traveller’s cheque does not expire and can be kept and used again in the future.
- Branded Cheques: The American Express and Visa offer branded traveller’s cheques that come in various denominations and are readily acceptable globally.
- Good exchange rates: In some cases, traveller’s cheques can access a better conversion rate.
Can Traveller’s Cheques Be A Hassle?
Traveller’s cheques have several advantages, but today, you can experience many struggles while using them.
For starters, the cheques have become outdated. Therefore, most hotels, banks, and individuals will decline them.
As a result, you will likely be forced to hunt down banks and hotels that will accept the traveller’s cheques prior to travelling. If you travel without doing your research, you can be frustrated finding that the cheques are not accepted at your destination.
Also, most banks no longer offer traveller’s cheques. The few banks that offer the cheques might charge you traveller’s cheque fees for the service.
Other Payment Methods That You Might Consider
Purchasing a traveller’s cheque may save you from the stress of carrying a large amount of money that can get lost or stolen. However, it has several limitations.
So, while travelling, you may need to consider the following alternatives:
The popularity of debit cards is increasing every day. The size of the card and its acceptability rate make it among the most convenient methods of payment. So, many foreign banks, hotels, and ATMs accept foreign debit cards.
Like a debit card, a credit card is small and secure to travel to various places. Besides, credit cards like MasterCard, Visa, and American Express are accepted as a method of payment in most countries globally.
Although carrying a huge amount of money while travelling is risky, it’s ideal to have a certain amount of money in cash for emergency purposes. For that reason, ensure you bring with you a given amount in the form of cash.
Prepaid cards work like debit cards and credit cards since you load them with your bank account money. Therefore, you can use your prepaid card as a debit card on the ATMs and credit card when making purchases and in hotels.
Traveller’s cheques are a safer, cashless method to use when travelling.
However, with the growing popularity of debit cards and credit cards, traveller’s cheques are quickly losing their place in the payment method.
Also, they are unacceptable in most places, making them more unreliable when travelling to destinations that limit their use. So, alongside your traveller’s cheque, carry your debit card, credit card, and some little cash to enjoy your travels.