sight draft issued through banks acting as sales agents, or sold directly to the public. The purchaser pays for the checks in advance, and signs the drafts twice-once when ordering the drafts and once when cashing them. The drafts are payable by the issuing company, sold in denominations of $10 to $100 and in numerous foreign currencies, and insured against loss or theft. They readily are accepted in lieu of cash by merchants, and may be cashed at bank offices in the United States and most foreign countries. Travelers' checks were first issued by American Express Co., which uses the spelling traveler's cheque.
check issued by a financial institution such as American Express, Visa, or Mastercard that allows travelers to carry travel funds in a more convenient way than cash. The traveler buys the checks, often for a nominal fee, with cash, a credit card, or a regular check at a bank or travel service office and then signs each traveler's check. The check can then be used virtually anywhere in the world once it has been countersigned with the same signature. The advantage to the traveler is that the traveler's check cannot be used by someone else if it is lost or stolen, and can be replaced usually anywhere in the world. Traveler's checks are also issued in many foreign currencies, allowing a traveler to lock in at a particular exchange rate before the trip begins. Many issuers of traveler's checks offer a type of check that enables two travelers to share the same travel funds. American Express was the first issuer to introduce this form of check. Institutions issuing traveler's checks profit from the float, earning interest on the money from the time the customer buys the check to the time they use the check.
