Disadvantages of travellers cheques when travelling

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Disadvantages of travellers cheques when travelling
Traveller's checks are an alternative to bringing your debit card to a foreign country, but they have some disadvantages. (business travel image by Albert Lozano from Fotolia.com)

Travelling to a foreign country is an exciting time. When travelling, many individuals will turn to the use of a traveller's check as their means of currency in another country. A traveller's check is a specialised check that can be purchased at a bank. It is used instead of an ATM or credit card and comes in several different currencies. Though they have advantages, there are some disadvantages to using traveller's checks.

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Commission Rates

Unlike the use of an ATM or credit card, when using traveller's checks you must deal with a 1 per cent commission rate for each check that you cash. There are some locations that will charge slightly higher commission rates. If traveller's checks are the sole means for financing travel, these commission rates can add up quickly.

Disadvantages of travellers cheques when travelling
Traveller's checks have high commission rates to use. (numbers image by Albert Lozano from Fotolia.com)

Bank Locations

Most traveller's checks have to be cashed at local banking institutions in order to get the funds. In order to do this, an individual needs to find a bank that accepts traveller's checks. With that comes the painstaking task of waiting in line and signing each individual check that needs to be cashed. In rural areas or third world countries, it can be difficult to find a bank or location willing to cash traveller's checks.

Disadvantages of travellers cheques when travelling
In some foreign countries it can be difficult to locate cashing locations. (bank image by Pefkos from Fotolia.com)

Replacing Lost or Stolen Cheques

Losing a traveller's check does come with some reassurance, but also some hassles. When purchasing a traveller's check, individuals are given a receipt for the purchase. This receipt should be kept in a different location than the checks themselves. In the event traveller's checks are lost or stolen, an individual must present this receipt as proof of purchase. Some institutions will take 24 to 48 hours to replace the checks, which can be inconvenient when stuck in a foreign country. In the event the receipt is also lost or stolen, the replacement process can be delayed even further.

Disadvantages of travellers cheques when travelling
A receipt can help replace lost or stolen checks, but there is still a few days delay. (Quittung image by BettinaBöttcher from Fotolia.com)

Merchant Refusals

There was once a day when a traveller could make a direct purchase from a merchant with a traveller's check. Unfortunately, more merchants in foreign countries are refusing to accept traveller's checks and will only accept cash or credit cards. That means that the individual will first have to go to a local bank location, cash their check for local currency and then make a purchase.

Disadvantages of travellers cheques when travelling
Merchants are now refusing to take travellers cheques as forms of payment. (cash and money image by Andrey Chmelyov from Fotolia.com)

Range of Currencies

Though a traveller's check can be purchased for currencies such as Euro, Canadian Dollars, Yen, Australian Dollars and Pound Sterling, there are limitations to other foreign currencies. When travelling to third world countries many companies will not sell traveller's checks in the correct currency. This means that the traveller will have to purchase the traveller's checks in their current currency and cash them for the country's currency upon visiting. This means that checks will be subject to an exchange rate which can fluctuate depending on the day or month they are used.

Disadvantages of travellers cheques when travelling
Not every currency in the world is available in a traveller's check form. (ytl image by timur1970 from Fotolia.com)

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