Advantages of traveler's checks include protection against theft or loss and access to money all over the world, including areas where there are few ATM machines. Disadvantages of traveler's checks include poor exchange rates, service fees and lack of convenience, according to a University of Albany exchange program fact sheet.
One of the biggest benefits of traveler's checks is the fact that they are insured. This means that, unlike cash, travelers can replace them if they are stolen or lost.
Traveler's checks are also accepted in many different countries around the world, which can make it easy to spend money in places where credit cards or debit cards are not widely accepted or where ATM access is limited.
However, traveler's checks can sometimes be inconvenient. They are no longer as popular as they once were, which means that many businesses no longer accept them, according to Lonely Planet. Travelers can exchange traveler's checks at banks to get around this problem.
Traveler's checks can also be expensive to use. They often offer poor exchange rates, and financial institutions usually charge service fees to issue or cash them. To reduce the costs of using traveler's checks, travelers can take out checks in the local currency of their destination. This can reduce exchange fees and protects travelers against fluctuating exchange rates. Travelers who take out checks in U.S. dollars should exchange checks at banks, as exchange houses and businesses usually offer lower exchange rates and may charge fees to make the exchange.