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How Travelers Checks Came to Be

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There used to be an item on almost everyone’s “get ready for vacation” list — go to the bank and pick up travelers checks, and maybe stock up on film for the camera. But times have changed. Many people find it more convenient to use ATMs, credit cards or debit cards for their vacation spending. And now you may be using your smartphone for vacation photos and to manage cash flow.

But travelers checks were (and arguably still are) a more secure way for travelers to carry cash. Customers sign the checks once when they are purchased, and then countersign when they are used, and salesclerks are responsible for making sure the signatures match. They work like cash, and if they are lost, you can report the loss (and the serial numbers) and the checks can be replaced — often within 24 hours.

Since the 1990s, the use of travelers checks has been in decline as other methods of payment, also secure, became more popular. And in recent years, some consumers have complained about some merchants and banks not accepting travelers checks. But travelers checks have a long history in the U.S., predating credit cards.

Travelers checks came to the United States in 1891; American Express employee Marcellus Berry is credited with coming up with the idea after company president James C. Fargo couldn’t get checks cashed in Europe despite his “letter of credit.” It was quite the insult for a widely recognized American businessman who was not quite so recognized when he traveled.

American Express offered the first U.S. “Travelers Cheques,” and competitors later offered similar products. But the allure of not having to carry lots of cash became less meaningful with the wider acceptance of credit cards, and then with debit cards that offered consumer protections.

If you’re planning a trip this summer and are looking to travel safely with your money, you may want to consider a credit card with no foreign transaction fees, as that can add 3% or so to every purchase you make while traveling with the card. (Understanding your credit can help make sure you apply for credit cards for which you’re most likely to be approved. You can check your credit scores for free on Credit.com.)

Keep in mind that travelers checks can help fill the cash gap you may encounter though, so travel prepared!

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