Traveler's Checks

When you're shopping in the Ticino, should you carry a wad of traveler's checks? (SNTO)

Not long ago, a reader asked: "Is anybody still using traveler's checks?" Good question. Today's conventional wisdom is that ATMs have made it unnecessary to carry large amounts of cash or cash substitutes. Automated Teller Machines also give a better conversion rate than banks and exchange counters do (or so the argument goes). And with an ATM card, you don't have to pay a fee of 1% or more for the safety of not carrying cash.

If only the answer were so simple! In reality, using ATMs can be almost as expensive as using traveler's checks at least some of the time, thanks to ATM conversion fees (see my article) and transaction fees that can add 5% to the cost of a modest cash withdrawal. The real benefit of using an ATM is convenience: Instead of waiting in line at an exchange window, you simply insert your card, enter your PIN number, and get your cash.

Still, there are times when it makes sense to carry traveler's checks (or "cheques," to use the spelling favored by Britain and American Express). For example:

• You're visiting a country for only a few hours (e.g., while waiting to change planes or on a shore excursion from a cruise ship). If you've just bought a snack or souvenir and the vendor doesn't take credit cards, using a traveler's check may be your only recourse.

• You're low on cash and the ATM network is down. (This seems to happen most often at night or on weekends.)

• The ATM won't accept your PIN, or the machine lacks multilingual instructions and you can't figure out how to get cash.

What kind of cheques to buy

Let's assume that you've decided to carry a modest stash of travellers cheques for use in emergencies. What kinds of checks should you buy? And in what denominations?

Next Page > Checklist for cheques > Page 1, 2

Photo: Copyright © Switzerland Tourism. Used by permission.

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