Are you planning to catch some summer sunshine abroad? What form of travel money are you intending on taking with you?
Researching a recent article for Which? Money, I looked into traveller’s cheques, and it made me wonder: how many people still use them as their primary source of spending abroad?
They’ve declined in popularity in recent years – in the past being offered by Thomas Cook and Visa, but now only by American Express (though Visa do still issue them to US customers).
I personally have never used them, and with the ease of using prepaid cards I probably never will. And before researching the article I’d not met a single person who had purchased or cashed one anytime within recent years.
How do they work?
Perhaps you’re not familiar with how traveller’s cheques work, so let me explain briefly. Traveller’s cheques are preprinted cheques for fixed amounts. They can be used when you’re on holiday in place of cash, or can be exchanged for cash while you’re away.
When you purchase them, you’ll need to sign each one (usually in the top left-hand corner) and take a note of the serial number of every cheque you are issued. This is in case your traveller’s cheques are lost and need to be replaced at a later date.
When you spend or cash them in, you’ll be required to countersign each one a second time in the presence of the person accepting it. This is so the two signatures on the cheque can be compared and your identity verified.
Advantages vs limitations
The key advantage of traveller’s cheques is that they’re safer to carry around than cash. Provided you’ve noted down the serial number of each cheque you were originally issued, you will be able to get them replaced should they be stolen or lost.
Another perk is that the cheques don’t have an expiry date, which could be useful if you go on a few holidays a year.
Unfortunately you’re limited to a very few (albeit major) currencies: US Dollars, Euros, Canadian Dollars, Australian Dollars, Pounds Sterling and Japanese Yen. It also may prove difficult to cash them (and expensive if you’re charged commission) – in many countries you’ll have to go to a bank or bureau de change.
If you’re a fan of traveller’s cheques have you considered prepaid cards as an alternative? They can be loaded up with money and used like a debit or credit card to pay in shops but they don’t have a borrowing facility.
You can choose from currency specific options – like a euro or dollar prepaid card – or go for a sterling prepaid card which can be used for multiple currencies worldwide.
Like traveller’s cheques, they’re a safer option to carrying cash as you can get your money back if it’s stolen – and, unlike a specialist credit or debit card for travel, you don’t need to pass a credit check to get one.
Other options include specialist credit or debit cards for travel, or cash (more useful when visiting a rural area with less access to cash machines).
So if you travel abroad, what’s your favoured form of spending? Do you prefer to rely on a card (whether it’s prepaid, debit or credit), cash or a good old traveller’s cheque?