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Are Traveler’s Checks Obsolete?

Some consider traveler’s checks the currency of the well-traveled cave man, and it’s true that fewer establishments accept them these days. While traveler’s checks are no longer the currency of choice for travelers, they can serve as backup to ATM and credit cards in a pinch.

In keeping up with the times, American Express now offers a stored-value card called a Traveler’s Cheque Card, which you can use wherever American Express credit cards are accepted, including ATMs. The card can carry a minimum of $300 and a maximum of $2,700, and it’s a very safe way to carry your funds.

Although you can get replacement funds in 24 hours if your card is lost or stolen, it doesn’t really strike us as a very good deal. In addition to a high initial cost ($14.95 to set up the card, plus $5 each time you “reload”), you still have to pay a 2% fee for each purchase in a foreign currency (similar to that of any credit card). Further, each time you use the card in an ATM you pay a transaction fee of $2.50 on top of the 2% transaction fee for the conversion—add it all up and it can be considerably more than you would pay for simply using your own ATM card.

Regular traveler’s checks are just as secure and cost less. Both Citibank (under the Visa brand) and American Express issue traveler’s checks in the United States, but Amex is better known and more widely accepted; you can also avoid hefty surcharges by cashing Amex checks at Amex offices. Whatever you do, keep track of all the serial numbers in case the checks are lost or stolen.

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To ensure a speedy refund, buy your own traveler’s checks—don’t let someone else pay for them: irregularities like this can cause delays. The person who bought the checks should make the call to request a refund.

For more tips on managing your money while traveling, see our Money Matters feature.

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