Travel abroad is costly enough these days without getting nickeled, dimed and dollared to death every time you reach for your cash card, credit card or traveler's checks.
Everyone gets a piece of the action. Banks charge up to a $5 transaction fee each time you use an automated teller machine. Credit card firms add a markup (as much as 3 percent) on foreign purchases. A foreign bank may charge up to 10 percent to cash a traveler's check.
A colleague recently returned from Italy - specifically Sicily and Puglia - where he had difficulty using his traveler's checks at all. Most hotels, restaurants and shops refused to accept them for payment, he said. On the other hand, he reported, he had no problem using his ATM and credit cards.
So what's the deal with traveler's checks? Are they on their way to extinction?
"Traveler's checks are nice to have if you have a habit of losing things or are traveling to a destination with a high crime threat, or to a very remote area," said John Briley of IJET Intelligent Risk Systems, international travel security specialists. "Otherwise, ATMs are virtually everywhere these days, with most accepting a variety of cards."
Ed Perkins, a consumer advocate, advised: "Forget traveler's checks unless you're paranoid about security issues with plastic."
American Express said its sales of traveler's cheques (AmEx's spelling) were up 2 percent in 2004 over the previous year, but didn't have 2005 figures. Visa said it doesn't release traveler's check sales figures "for competitive business reasons," but AAA, perhaps the largest purveyor of Visa traveler's checks, indicated that its sales were "flat," according to Justin McNaull, AAA's national spokesman.
What seems to be replacing traveler's checks are electronic check/money cards, which American Express and Visa sell. The money cards look like credit or ATM cards but are pre-loaded with a set amount of money that can be drawn upon by any establishment that accepts credit cards. The prepaid electronic money cards carry the same security as traveler's checks - if lost they are replaceable within 24 hours - and they are not linked to your bank account.
"We have seen expanded use of the Visa TravelMoney Card and expect in the big picture travelers will transition from paper traveler's checks into the electronic payment cards," McNaull said. "The checks do still have advantages in some remote locations, though, where electronic payment has not yet become the standard."
Part of the switch from paper to plastic is generational, McNaull said. "I'm 33 and have never used traveler's checks. There are a lot of folks my age who never have."
What's important for travelers to understand is the rapid move away from paper checks to plastic. "Typically, merchants don't cash traveler's checks," said Brett Henry, who manages AAA's traveler's check program. "We're seeing more and more around the world that merchants are less receptive to traveler's checks, given the environment now of accepting plastic products and getting immediate authorization."
Henry added that traveler's checks for payment are more readily accepted in the United States than they are any place else in the world.
As for where to cash AAA's Visa-branded traveler's checks abroad, Henry said purchasers are given an information card with phone numbers for each country. Travelex Group, described as the world's largest issuer of Visa and MasterCard traveler's checks, cashes checks for free in its more than 700 city center offices and money exchanges in 97 airports around the world. Travelex check-cashing locations, including banks, also can be found online at www.cashmycheques.com.
Best advice for travelers is to carry what American Express calls a "diversified wallet," meaning a combination of credit cards, debit cards, local currency and traveler's checks/check card. With both American Express and Visa, ask for specifics about where to cash their checks for free. AmEx, for example, has that information on its Web site, but I found it difficult to locate.
Now about those relatively new check cards.
The American Express Travelers Cheque Card, launched last year and an upgrade of its earlier TravelFunds Card, carries a $14.95 issuance fee and is available from American Express online (americanexpress.com), at AmEx offices, some banks and travel agents, or by calling 866-811-8832. The card can be loaded with up to $2,750, 1,500 pounds or 2,200 euros. It also can be used as an ATM card for $2.50 per withdrawal when you get a PIN. The card is good for three years but can be reissued for $5 and can be reloaded three times for $5 per reload.
The Visa MoneyCard, available from AAA (aaa.com/travelmoney; 866-339-3378) for an activation fee of $4.95, can be loaded with up to $1,500 and can also be reloaded, for free, a maximum of three times. The card, good for 24 months, can be used for ATM withdrawals for a $2 charge internationally, $2.50 domestically. The Visa MoneyCard also is available from National City Corp. (nation alcity.com/travelmoney; 800-257- 8761) for $12.95. Issuing institutions set the fees for cards.
Once you have come up with a strategy for how to handle your travel cash needs, there are a few other areas you should think about. Among suggestions from consumer advocate and columnist Ed Perkins on how to save yourself a few bucks:
Don't let a foreign merchant bill your credit card in U.S. dollars rather than foreign currency to avoid getting hit with a lousy exchange rate and a bank surcharge.
Don't exchange dollars for foreign currency at U.S. airports where the rate of exchange isn't favorable.
Don't use credit cards to withdraw cash.
Don't exchange traveler's checks at a hotel desk where the rates are generally very low.
One more thing that can save you grief: Protect your money. Take what you need when you leave your hotel room. Leave extra cash in the hotel safe.
Alfred Borcover is a freelance reporter for the Chicago Tribune.