Travelers Checks Vs. Credit Cards

A single credit card is more convenient than a pile of travelers checks.
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Travelers checks once were a popular form of payment for vacationers and business travelers. But in recent years they have become an increasingly rare form of exchange, according to Budget Travel. Credit cards are among the payment types more frequently used by travelers, who prefer the cards' convenience and simplicity.


A major difference between travelers checks and credit cards is when you pay for them. You purchase travelers checks for a specific amount, paying for them in advance. That ties up your money before you spend the checks. A credit card allows you to buy on credit. The card issuer then bills you for the amount you owe, requiring at least a minimum payment each month. You're charged interest for any portion of the bill that you don't pay off each month.


An advantage that both travelers checks and credit cards have over cash is that they can be replaced. So if you lose your travelers checks or credit card, or if they're stolen, the company that issued them typically will replace them. In the case of a credit card, the card issuer usually doesn't make you pay for any unauthorized charges that you didn't make. Issuers of travelers checks might not replace them if they decide that you were negligent in their disappearance, according to

Foreign Exchange

A major disadvantage to using travelers checks is navigating exchange rates and fees in foreign countries, according to Budget Travel. When you want to cash a travelers check in U.S. dollars in a foreign country, you must pay a conversion fee. In most countries, the fee to make that exchange can be significant, cutting into the value of your money. Credit cards typically simply make the charge in the currency of the host country with a much smaller fee from the card issuer, according to The New York Times.


Merchants abroad don't always honor travelers checks, because they are rarely used these days, according to Budget Travel. Some European hotels no longer accept them. Some merchants might decline them because they wonder whether they're fake, according to The New York Times. Major credit cards are much more likely to be honored. The New York Times says that in remote locations, cash might be necessary because frequently, neither travelers checks nor credit cards are accepted there.

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