How Do Traveller's Cheques Work?

Traveller's cheques were once the preferred method of travellers to take money along with them when they travelled. But they are not so common now, even though they are still widely available and acceptable. They are, however, not as convenient to use as credit cards, and not too many places, except large departmental stores and hotels, accept traveller's cheques nowadays.

Traveller's cheques are issued in a specified currency, usually American dollars. The main advantage of a traveller's cheque is that it ensures complete protection against the loss or theft of the cheque. If the traveller's cheque is lost or stolen, or if a person reports a case of a missing traveller's cheque, the company that has issued the cheque will immediately pay heed to the complaint and arrange to have it replaced at the earliest. However the person who has misplaced the cheque must remember the number written on the cheque. A major demerit of using traveller's cheques is that you have to pay fees for both the purchase of a new cheque and for the use or encashing of the cheque.