Although travelers cheques used to be the most common option for traveling with currency and getting the best exchange rates with the lowest fees, they no longer are. In fact, using traveler’s cheques can be a big mistake.
A reader emailed me recently about having taken travelers cheques with her to Europe, and how much trouble she had:
“I unfortunately traveled with travelers cheques from American Express in Euros. You’d think Euros were Euros but they are not. Have not been able to cash them despite going to 12 banks. And there is no Amex office…”
Even when I lived and worked at a hostel in Hawaii in 2008, we accepted travelers cheques the (very) few times they were offered, but begrudgingly so, as they entailed more work than reward.
The Decline of Travelers Cheques
According to Wiki, travelers cheques have been going steadily out of favour since the 1990s, with alternatives like credit cards, debit cards, and ATMs becoming more common, convenient, and cost-effective.
They also pose security risks for retailers, who would rather fork out commissions to accept credit cards instead.
Now travelers cheques (as my reader above discovered) are difficult to cash, even at banks.
And travelers cheques aren’t even all that secure for travelers either. At one point in time, they were a viable alternative to carrying large amounts of cash. But these days, your cash is best left in your bank account (or travel savings account), and accessed when you need it via credit card or debit card.
How do I Pay for Stuff Abroad?
I am a fan of credit cards. I get a decent exchange rate, a record of my purchases, the security of not carrying huge wads of cash, and of course, frequent flyer miles. (And for the record, I carry two credit cards).
However in Peru where I am currently stationed, Panama where I recently was, and many places in Asia where I’ve been like Vietnam), credit cards aren’t as widely accepted, and I’ve been subjected to foreign ATM withdrawal fees (at $5 bucks a pop) that piss me off. So I’ve just switched my bank account from the no-frills value account option to the highest all-inclusive account option which includes unlimited foreign ATM transactions for free. The catch: a hefty monthly account fee. The loophole: Maintaining a certain balance in my bank account waives the fee.
Have you used Travelers Cheques abroad? How do you prefer to pay for stuff?
Other Money-Management Travel Tips
Scroll through this resource for other tips for managing your money on the road: