In Dec. 2006 our friend Mary visited Vicki and me in Buenos Aires. Before leaving Washington D.C. she had the awful idea of buying Citibank traveler’s checks. Well, she explained, the Bush girls–the twin daughters of President and Laura Bush–had recently had their purses stolen in a Buenos Aires bar. Mary was worried about security, so on impulse she bought the checks.
Bad idea. When she arrived in Buenos Aires, her hotel wouldn’t accept the checks. She tried an exchange house, then a couple of banks, but no luck. In desperation she went to Citibank in Buenos Aires–remember these were Citibank traveler’s checks–but Citibank turned her down cold. They don’t accept traveler’s checks. Mary pointed out that these were Citibank traveler’s checks, and this was a Citibank branch. Ah, the local people explained, these traveler’s checks come from Citibank New York, we’re Citibank Buenos Aires, not really the same Citibank at all, you understand. Mary didn’t understand, but got the point: Citibank traveler’s checks are no good at Citibank.
A little background: Traveler’s checks were invented by American Express Bank in 1891. J.C. Fargo, then President of American Express Bank, had just traveled to Europe and had a difficult time getting the money he needed. J.C. figured if he, the president of a bank, with wire transfers all approved and set up in advance, had trouble, the average traveler must be desperate. He returned to New York and asked someone to invent American Express traveler’s checks–he spelled them "cheques" to differentiate. These American Express traveler’s checks were an immediate success, enabling traveler’s to carry money around the world without worrying about loss. The cheques also earned tons of money for American Express, who got to invest the float while their customers were running around the world with these little pieces of paper in their luggage. By 1915 American Express had a Travel Division, again breaking new ground.
In the 1950s and 1960s, when international travel really took off, Barclay’s, Bank of America, and others stepped in with competing products. But beginning in 1980 or so, traveler’s checks became obsolete. They were replaced by something far better: ATM machines. Get local currency anywhere in the world with just an ATM card or debit card. You get better security, a better exchange rate, and more flexibility. It’s a no-brainer. If you’re going to a country that doesn’t have ATM machines–North Korea, I suppose, or some African republic–it’s a cinch they won’t accept traveler’s checks, either.
But habits die hard, and Mary hadn’t traveled in years. She bought the checks. (Incidentally, although these were Citibank traveler’s checks, with the Citibank name in bold type, the checks themselves state that they’re American Express traveler’s cheques, not Citibank at all.)
The end of the story? Mary ran out of money and as a favor Vicki and I cashed some of her traveler’s checks for her. We mailed them to our bank in the United States, but our bank wouldn’t accept them. Just as a guess I’d say banks have a problem with the Patriot Act; they dislike the anonymity of traveler’s checks. Or maybe banks don’t want to bother with low volume. Just guesses. Anyway, last we heard Mary was calling Citibank to find out what to do. But we got the point, and now you get it, too: traveler’s checks are a thing of the past, once great, now useless.
Paul Terhorst, Buenos Aires, Argentina, Sunday, Oct. 21, 2007
Roving “Retire Early” Editor, International Living