-> traveler\'s check
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- A travelerís check is a fixed-amount pre-printed check that allows persons to sign and make unconditional payments to third parties. These checks are issued by financial institutions and work as cash, but they are protected against possible theft or loss. Travelerís checks are handy when it comes to oversees travel and travelling in general. When travelling oversees, not all debit and credit cards a person carries will be accepted, so it is a good idea to have travelerís checks. In some cases, a person who exchanges money for travelerís checks will have to pay a commission or charge, but some issuing institutions offer them for free.
A travelerís check represents a medium of exchange that functions instead of hard currency. These checks were introduced in 1891 by American Express and are a safe way of carrying money abroad. The issuing party, which is typically a bank, provides security in case of stolen and lost checks. The separate checks come with unique numbers much like regular checks. In case a stolen or lost check is identified and reported, the bank will cancel the check and re-issue a new one. Although customers are issued checks directly by banks, these are produced by a third party.
Having said that, a travelerís check comes with the advantages of regular checks but carries none of the associated risks. To obtain a travelerís check, you have to go to a currency exchange office or bank, carrying your check book and some form of identification. Ask to buy travelerís checks, writing a check for the amount of money you want them to be worth. It is a good idea to ask for a mix of different denominations, e.g. $100, $50, and $20. The teller will ask you to sign on the top line of all checks. The teller will also give you receipts which should be kept separately from the checks. The checks cannot be reissued in case you loose both the checks and the receipts. Keep the travelerís checks in a secure place and make sure they are clean and dry. Note that you will get unfavourable exchange rates in some countries while in others, you are likely to get better exchange rates. In addition, checks in denominations of $100 may not be easy to cash in small towns.
Travelerís checks can be ordered in several currencies, including Euro, Canadian dollars, US dollars, Chinese Yuan, Japanese yen, and Pounds sterling. These checks do not have an expiry date and can be used for purchases at any time. Suppliers of travelerís checks give to issuers an interest-free loan. For this reason, banks sell checks commission-free. When a commission is charged, it is normally in the amount of 1 Ė 2 percent of the full value.
When you want to cash your check as to make a purchase, you have to countersign and date the check in the presence of a payee. Several travelerís checks can be used, and the most commonly used ones are American Express and Thomas Cook Group.
As a security measure, you may be requested to show an ID (e.g. a passport or driverís license). The purchaserís signature is compared on the check and the ID. Finally, the majority of travelerís checks are the type of one-signature checks, meaning that one person is allowed to sign and cash them. They can be dual-signature checks as well, for example, signed by two spouses. Two persons sign the travelerís checks and either one can cash them. The signature of both spouses is not required on cashing the checks.