Holiday Money: A travelling companion in a world of change

Travellers' cheques offer the best security, says Christina Stopp

The London bankers Herries, Farquhar came up with a precursor to travellers' cheques in the 18th century. Known as "circular notes", they were issued to a minimum pounds 20 value, and could be cashed in 160 European towns.

In 1874, Thomas Cook relaunched the idea in New York, with the co-operation of 400 hotels in Europe, America and the Middle East. By the 1890s, Cook's Circular Note system was in use worldwide. At this point the American Express Company - offspring of Wells Fargo, of stagecoach fame - also took up the idea with its travellers' cheques. The rest is history.

In 1909, Cook's $20 travellers' cheque had the rates of exchange printed on its face. The sterling equivalent of $20 was pounds 4 1s 8d, or Fr102.5, or DM83.3. Times have changed. Today, rapidly fluctuating exchange rates are a concern for the traveller using cheques. They mean a possible gain or loss if you have any left over at the end of the holiday. Or you can commit yourself to an exchange rate at the outset by buying cheques in the local currency.

At a Thomas Cook office you can buy cheques on the spot in any of 13 currencies. The Australian dollar and South African rand are easy to find. At the Abbey National and the Halifax you can get Saudi ryal cheques. But foreign currency cheques will cost you extra from most outlets: pounds 500 in French francs costs pounds 9.50 from the Abbey National compared with pounds 7 for pounds 500 of sterling cheques. French franc cheques cost pounds 10 at First Direct, NatWest and Thomas Cook, all of whom charge just pounds 5 for the sterling equivalent.

Neither American Express nor the Halifax makes a distinction between sterling and currency travellers' cheques in the commission charged, both levying 1 per cent, but the Halifax's additional pounds 2 handling charge puts the cost of a pounds 500 order up to pounds 7.

Handling charges are the norm with issuers where you have to order your cheques: Abbey National and the Halifax, though not First Direct (see table). None of those shown in the table makes any charge for buying back unused sterling cheques, though you will be expected to produce your original receipt. Abbey National and Barclays (some currencies only) make a charge on unused non-sterling cheques which they issued.

Amex and Thomas Cook have networks of offices abroad where you can cash cheques with no charge. Thomas Cook has arrangements with bank chains in some countries whereby the bank will cash their cheques cheaply or for free. With most other issuers, you are dependent on the charges levied at the hotel reception, bank or bureau de change. Don't forget to compare exchange rates as well as charges. An office charging nil commission will probably have loaded its rate of exchange to recoup costs.

In France, it is also worth asking if the shop or restaurant will take a travellers' cheque. Cheques used in this way are taken at face value, so there is no further charge.

Travellers' cheques are, arguably, more secure than plastic when abroad. If you lose your cheques, say Cook's, the local Cook's office can replace them in as little as half an hour.

Cheques offer security in another sense. Many people like to feel they have paid for the holiday before they set out, with no credit card bill awaiting them on their return.

Convenience may also come into the equation, if you want to be able to walk into a shop on the morning you go on holiday and buy cheques in various currencies. If you have to order your cheques it will be slower and probably dearer, though some banks now quote a cut-off time. If you phone your order before the cut-off time, you will get your cheques the next day.

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at

Arts and Entertainment
Lou Reed distorted the truth about his upbringing, and since his death in 2013, biographers and memoirists have added to the myths
musicThe truth about Lou Reed's upbringing beyond the biographers' and memoirists' myths
Ed Miliband received a warm welcome in Chester
election 2015
Life and Style
Apple CEO Tim Cook announces the Apple Watch during an Apple special even
fashionIs the Apple Watch for you? Well, it depends if you want it for the fitness tech, or for the style
Finacial products from our partners
Property search
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    SThree: Trainee Recruitment Consultant

    £20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...

    Ashdown Group: IT Manager / Development Manager - NW London - £58k + 15% bonus

    £50000 - £667000 per annum + excellent benefits : Ashdown Group: IT Manager / ...

    Recruitment Genius: Sales Consultant / Telemarketer - OTE £20,000

    £13000 - £20000 per annum: Recruitment Genius: Scotland's leading life insuran...

    Ashdown Group: Training Programme Manager - City, London

    £40000 - £45000 per annum + benefits : Ashdown Group: Training Programme Manag...

    Day In a Page

    NHS struggling to monitor the safety and efficacy of its services outsourced to private providers

    Who's monitoring the outsourced NHS services?

    A report finds that private firms are not being properly assessed for their quality of care
    Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

    Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

    The Tory MP said he did not want to stand again unless his party's manifesto ruled out a third runway. But he's doing so. Watch this space
    How do Greek voters feel about Syriza's backtracking on its anti-austerity pledge?

    How do Greeks feel about Syriza?

    Five voters from different backgrounds tell us what they expect from Syriza's charismatic leader Alexis Tsipras
    From Iraq to Libya and Syria: The wars that come back to haunt us

    The wars that come back to haunt us

    David Cameron should not escape blame for his role in conflicts that are still raging, argues Patrick Cockburn
    Sam Baker and Lauren Laverne: Too busy to surf? Head to The Pool

    Too busy to surf? Head to The Pool

    A new website is trying to declutter the internet to help busy women. Holly Williams meets the founders
    Heston Blumenthal to cook up a spice odyssey for British astronaut manning the International Space Station

    UK's Major Tum to blast off on a spice odyssey

    Nothing but the best for British astronaut as chef Heston Blumenthal cooks up his rations
    John Harrison's 'longitude' clock sets new record - 300 years on

    ‘Longitude’ clock sets new record - 300 years on

    Greenwich horologists celebrate as it keeps to within a second of real time over a 100-day test
    Fears in the US of being outgunned in the vital propaganda wars by Russia, China - and even Isis - have prompted a rethink on overseas broadcasters

    Let the propaganda wars begin - again

    'Accurate, objective, comprehensive': that was Voice of America's creed, but now its masters want it to promote US policy, reports Rupert Cornwell
    Why Japan's incredible long-distance runners will never win the London Marathon

    Japan's incredible long-distance runners

    Every year, Japanese long-distance runners post some of the world's fastest times – yet, come next weekend, not a single elite competitor from the country will be at the London Marathon
    Why does Tom Drury remain the greatest writer you've never heard of?

    Tom Drury: The quiet American

    His debut was considered one of the finest novels of the past 50 years, and he is every bit the equal of his contemporaries, Jonathan Franzen, Dave Eggers and David Foster Wallace
    You should judge a person by how they peel a potato

    You should judge a person by how they peel a potato

    Dave Hax's domestic tips are reminiscent of George Orwell's tea routine. The world might need revolution, but we like to sweat the small stuff, says DJ Taylor
    Beige is back: The drab car colours of the 1970s are proving popular again

    Beige to the future

    Flares and flounce are back on catwalks but a revival in ’70s car paintjobs was a stack-heeled step too far – until now
    Bill Granger recipes: Our chef's dishes highlight the delicate essence of fresh cheeses

    Bill Granger cooks with fresh cheeses

    More delicate on the palate, milder, fresh cheeses can also be kinder to the waistline
    Aston Villa vs Liverpool: 'This FA Cup run has been wonderful,' says veteran Shay Given

    Shay Given: 'This FA Cup run has been wonderful'

    The Villa keeper has been overlooked for a long time and has unhappy memories of the national stadium – but he is savouring his chance to play at Wembley
    Timeless drama of Championship race in league of its own - Michael Calvin

    Michael Calvin's Last Word

    Timeless drama of Championship race in league of its own