Traveler’s Check

Updated on March 19, 2024

What Is A Traveler’s Check?

A traveler’s check refers to a kind of check used instead of hard currency by travelers. They use it to pay for purchases and obtain local currency. It is issued by institutions functioning in the banking and financial services industry.

Traveler's check

You are free to use this image on your website, templates, etc, Please provide us with an attribution linkHow to Provide Attribution?Article Link to be Hyperlinked
For eg:
Source: Traveler’s Check (

It was a popular medium of exchange in the older times, enabling the tourists to handle money matters instead of carrying foreign currency while traveling overseas. It is an example of a negotiable instrument recognized as safe because the risk associated with its usage is low compared to other forms of payment.

Key Takeaways

  • A traveler’s check definition portrays it as a form of a check used by travelers in place of cash while traveling abroad. Tourists can use it to pay for things and obtain local money while they are overseas.
  • Users can manage their transactions easily using it when they are on vacation or visiting foreign countries.
  • This negotiable instrument is issued by institutions functioning in the banking and financial services industry.
  • It is easy to use, has no expiry date, is not easy to forge, and will get a replacement if lost. But, at the same time, it also has disadvantages like adding purchase fees, etc.

Traveler’s Check Explained

Traveler’s checks are pre-filled checks with a specific amount of money. They work similarly to cash. It is like prepaid money is stored in these checks that can be used to purchase goods or services in the local currency. In addition, they protect against loss or theft because the check holder shows identification and signature proof to cash the check. As a result, traveler’s checks are regarded as a secure form of taking money abroad.

There are various parties involved while issuing a traveler’s check.

  • Obligor or Issuer: The company that issues the check, such as Bank of America, Citibank, or American Express.
  • Agent: The bank or other institution that sells them is known as an agent.
  • Purchaser: The individual or company purchasing them is termed the purchaser.
  • Payee: The organization that receives the check in payment for services or goods, such as a retail store, hotel, restaurant, or bank. In exchange for a traveler’s check, a bank pays cash.

Certain financial institutions issue traveler’s checks. The signature is completed immediately after acquiring the checks. Then, when the check is ready to be cashed or exchanged, the payee’s name and date are filled in, and the check is signed again. The second signature is done when it is used or cashing it.

Usually, in front of the authorized person responsible for cashing the check like the cashier at the bank and in other cases person or business to whom the user or traveler is making payment. Therefore, the two signatures should be identical. Hence, it is a dual signature instrument signed and used by one individual.

–>> If you want to learn Financial Modeling & Valuation professionally , then do check this ​Financial Modeling & Valuation Course Bundle​ (25+ hours of video tutorials with step by step McDonald’s Financial Model). Unlock the art of financial modeling and valuation with a comprehensive course covering McDonald’s forecast methodologies, advanced valuation techniques, and financial statements.


Let us look at traveler’s check examples to understand the concept better:

Example #1

Thomas Cook’s traveler’s check evolution started from the “Cook’s Circular Note,” a forerunner of the traveler’s check. It was originally made available in denominations of £5 and £10 in 1874 by Thomas Cook’s company. The circular note later became known as traveler’s check, a trademark of American Express. To become the leading provider of traveler’s checks outside of the United States, Thomas Cook purchased a Barclays Bank PLC business that issued checks in 1994.

Following a thorough evaluation of its international operations in the same year, Thomas Cook sells its travel management company to American Express. Thomas Cook On-Line started in 1997. It is the first retail travel agency in the UK to let consumers buy foreign currency traveler’s checks, etc.

Example #2

American Express traveler’s checks are popular in many nations. Purchases can be made in advance in the chosen currency and are commonly accepted by banks, exchange services, and even businesses that cater to tourists.

Advantages and Disadvantages

There are several advantages and disadvantages of a traveler’s check:


Traveler’s checks are a safe means to handle transactions abroad and provide a wide range of benefits. Traveler’s checks can be useful for foreign travelers in the following ways:

  • First, it is easy to use.
  • It comes with no expiry date.
  • Another advantage is that it is a secure medium of exchange.
  • No risk of losing the value or asset since it can be reported if lost and will get a replacement.
  • They are not easy to forge.
  • This type is less attractive for illegal activities than credit or debit cards.
  • The event of stealers using a stolen check is not easy due to the stringent signing requirements.


There are several disadvantages of the checks that have reduced their usage in recent times:

  • It has expenses like purchase fees.
  • An older mode that is not prevalent nowadays.
  • Not widely available in the present world.
  • May get a less competitive exchange rate.
  • Nowadays not directly accepted everywhere and may face difficulty converting.

Frequently Asked Questions (FAQs)

Do traveler’s checks expire?

Travel checks come with no expiry date. That is, the period of validity is unlimited. Any check bought but not used at the intended time can be redeemed or applied during the next trips. If the check is lost or stolen, the user is entitled to a refund if certain requirements, conditions, and limits are met, such as showing proof of purchase and identification.

Where to buy traveler’s checks?

This negotiable instrument is available through its issuers, agencies like banks, money changers, or even tour operators in various denominations and currencies. It is accepted in many nations, and travelers can use it at stores and other places. It typically costs a small percentage of the purchase, like 1% or 3%. Examples of organizations issuing it include American Express and Visa. 

How to cash a traveler’s check?

Users can cash them at banks as one approach. To continue, the user must date the checks, show them to the bank cashier with their picture ID, fill out the “Pay To” column, and countersign in the cashier’s presence. The full value will be returned to the user in cash. However, certain institutions may charge a fee for the service.

This article is a guide to What is Traveler’s Check and its meaning. Here, we explain its advantages, disadvantages, and examples. You can also go through our recommended articles on corporate finance –

Reader Interactions

Leave a Reply

Your email address will not be published. Required fields are marked *