A traveler's check is a certificate for a certain amount in foreign currency, issued to a specific person. In appearance they are very similar to ordinary money: they are printed on special paper with several levels of security, and the currency and denomination are also indicated. Checks in dollars are most common, slightly less often in euros, Canadian and Australian dollars, Japanese yen.
The pioneers of the traveler's check market are American Express and Thomas Cook. In 1850, Thomas Cook organized the first group trip, laying the foundation for the tourism business. His clients needed a safe and simple means of payment during trips, and he introduced into circulation a kind of circular note - the prototype of the modern traveler's check. This idea began to take shape as a successful business with the advent of American Express. In 1892, they issued traveler's checks for those traveling from the New World to the Old World. They could be used to receive cash and exchange it for local currency. Buying a traveler's check was accompanied by a package of services that included ticket booking and consultations.
Currently, more than a dozen types of traveler's checks are used in the world, but American Express, Thomas Cook, as well as their younger competitors - Visa and City Corp - still lead in authority and popularity. The main difference between them is the regions of use. Thus, American Express checks are widespread in the USA, Visa and Thomas Cook are more preferable in Europe, and City Corp in Asian countries.
In Western Europe and the USA, American Express and Thomas Cook checks are accepted for payment in the subway, taxis, hotels, restaurants, and stores on par with ordinary money. In China, Croatia and Japan, they must first be exchanged for local currency. In Egyptian cities Cairo, Luxor, Aswan, there are representative offices of American Express and Bank of Alexandria, where you can cash traveler's checks without a commission. American Express has representative offices in the Czech Republic, so it is not necessary to carry cash there either. Thomas Cook checks are well accepted in Cyprus, Finland, Greece, Italy, Malta, and Spain. In other countries, they can only be used to pay for a hotel and purchases in some stores.
The word "more profitable" in this case means "without commissions." The fact is that when selling checks, as when buying, you usually have to pay. You can buy checks in Ukraine by paying a commission of 1% of the cost. But how much you will sell them for later depends on the country, the specific bank, and your awareness.
Every company that issues traveler's checks has agencies around the world where you can exchange them for cash for free. If you exchange checks at a third-party bank, the commission reaches 10%. In addition, the bank may charge a minimum commission of $5-10 for the exchange. That is, even if you buy traveler's checks in the amount of $20, it is quite possible that you will have to pay $10 in commissions alone. Plus, you can lose a considerable amount on the exchange rate if the check currency does not match the currency of the country you are in.
In general, there is one conclusion: do not exchange checks at the first bank you come across, look for one that offers the most favorable rate. And if your route goes through African nature reserves or Asian villages, it is better to take cash.
If everything is so complicated with traveler's checks, why not get a plastic card? Because traveler's checks have certain advantages over them. Firstly, unlike plastic cards, traveler's checks do not require the execution of insurance deposits or non-burnable balances in the bank, and the procedure for purchasing them takes a minimum of time. When a client withdraws money from a plastic card abroad, he in any case pays from 1.5 to 5% of the transaction amount, while checks can often be cashed for free. In addition, only the issuing bank can restore a lost plastic card. That is, if you lose your card at the beginning of your vacation, you will have to rely only on the remaining cash until you return home. And even with cases of fraud, owners of traveler's checks, unlike holders of "plastic", almost never encounter.
There is no need to talk about the advantages of traveler's checks over cash. Firstly, according to customs legislation, you can export no more than $10,000 abroad. And customs officers do not limit the amount in traveler's checks; it is enough to present them with a certificate from the bank about the purchase. But the most significant advantage is manifested in the loss or theft of a traveler's check. If your wallet is stolen abroad, only law enforcement agencies can return your money, and only if you are lucky. A stolen check, in essence, remains with its owner. Even if someone else cashes it, the owner, as a rule, will still get his money back. The main thing is that you report the loss to the police and the World Refund Service as soon as possible, whose coordinates will be given to you when purchasing the check. They are usually restored within a day and do not charge money for it.
Useful tips:
• The visible difference between checks and cash is the presence of signatures on them. You put your first signature when you buy a check, and you sign again in the presence of the cashier when you pay with it or exchange it for cash. Therefore, the most important advice is never to put a second signature on checks in advance.
• At the time of purchasing traveler's checks, the owner is necessarily issued a receipt. It is the main document allowing you to reimburse your funds. So the second advice is to keep the receipt separately from the checks, otherwise you will have nothing to present as proof. However, even if you foolishly put it in your wallet and lost it along with the traveler's checks, there is still a chance to get the money. The bank always keeps a copy of your purchase receipt, so you should immediately contact it and ask to restore the receipt and provide you with information about the serial numbers of the lost checks.
• You must report the loss within 24 hours. To do this, you at least need to know technical support phone numbers and office addresses.
• Checks should be stored like cash - in a safe place. If the police confirm to the bank that you left checks for a large amount in the car's glove compartment, there will be problems with their reimbursement. In general, despite the fact that money converted into traveler's checks cannot be stolen, it's better not to relax.