A Traveler’s Check (traveller’s cheque) is a medium of exchange that is used by tourists as an alternative to hard currency. A traveler’s check is for a prepaid fixed amount and has the same function as cash. It comes in several fixed denominations in different major world currencies and does not have an expiration date.
Because their value is fixed, it is a safeguard in countries with fluctuating exchange rates. Unlike a credit card or a debit card, the traveler’s check is not linked to a customer’s bank account or credit score and does not contain personal information, decreasing the risk of identity theft. To verify the check, the customer signs it twice—on the date of purchase and on the date of cashing it in.
The traveler’s check can never ‘bounce’ unless the issuer goes bankrupt or out of business. As long as there are matching signatures on the traveler’s check, the issuer will guarantee payment of the face amount, even if it was fraudulently issued, stolen, or lost. Lost or stolen checks could be replaced by the issuer.
Due to the convenience and wider acceptance of credit and debit cards and the wider availability of ATMs, the use of traveler’s checks has become outmoded.