how traveler s checks work
a traveler s check is for a prepaid fixed amount and operates like cash so a purchaser can use it to buy goods or services when traveling a customer can also exchange a traveler s check for cash major financial service institutions issue traveler s checks and banks and credit unions sell them though their ranks have significantly dwindled today a traveler s check is similar to a regular check because it has a unique check number or serial number when a customer reports a check stolen or lost the issuing company cancels that check and provides a new one they come in several fixed denominations in a variety of currencies making them a safeguard in countries with fluctuating exchange rates and they do not have an expiration date they are not linked to a customer s bank account or line of credit and do not contain personally identifiable information therefore eliminating the risk of identity theft they operate via a dual signature system you sign them when you purchase them and then you sign them again when you cash them which is designed to prevent anyone other than the purchaser from using them many banks hotels and retailers used to accept them as cash although some banks charged fees to cash them however with the rising worldwide use of credit cards and prepaid debit cards such as the visa travelmoney card which offers zero liability for its unauthorized use it is getting much harder to find institutions that will cash traveler s checks history of traveler s checksjames c fargo the president of the american express company was a wealthy well known american who was unable to get checks cashed during a trip to europe in 1891 a company employee marcellus f berry believed that the solution for taking money overseas required a check with the signature of the bearer and devised a product for it american express and visa still use the british spelling on their products 