Sun, sand and solvency

The convenience of the cashpoint machine is persuading more holidaymakers to stop using travellers' cheques. But those visiting remote destinations should not rely on cashpoints. In the middle of nowhere travellers' cheques remain the safest way of carrying wealth that is relatively easy to encash.

Travellers' cheques are safest because if they are lost or stolen you should be able to get free replacements within 24 hours of reporting the loss and there is no liability if the cheques are misused. But choosing the right brand is important when going off the tourist trail as not all brands will be readily accepted in all countries. American Express, for example, says that there can be difficulties for people using its travellers' cheques in countries where the United States has imposed sanctions. This includes Cuba, North Korea and Iran as well as Iraq and Libya, while lower- level disputes can also cause difficulties in the Lebanon, Serbia and some other former Yugoslav republics.

If you are travelling to a remote destination it is sensible to seek advice on the likely acceptability of travellers' cheques before buying them, by phoning the help lines of the main travellers' cheque issuers and by speaking to the tourist office or embassy of the country to be visited. Travellers' cheque issuers will usually give honest information about any difficulties.

Susan Kilby, a spokeswoman at Thomas Cook, says: "It is not in our best interests to sell travellers' cheques where it causes problems. We do prefer people to call us before they go, and sometimes we give people addresses of where to cash travellers' cheques." Ms Kilby advises the visitor to remote places to carry a mix of ways of paying for things: sterling and local currency, as well as travellers' cheques and plastic cards for use in cash machines and at point-of-sale. The mix should be geared to local banking realities. In Nepal and much of the Indian sub- continent there will be few traders who accept credit and debit cards, for example. In Latin America, says Ms Kilby, there are lots of cash machines, but many of them will not accept plastic cards issued in Britain. Travellers' cheques, by contrast, are becoming more widely accepted in the former Soviet countries.

While sales of travellers' cheques to European-bound holidaymakers are going down, with more holidaymakers relying on plastic cards, they remain popular for travellers to the Indian sub-continent, the Far East and Africa. But in some countries, such as Nicaragua, it should be noted that banks will expect people to supply a copy of their driving licence as well as their passport before cashing them. By comparison in the United States, travellers' cheques can commonly be used as a cash substitute in shops.

American Express says its cheques can be cashed in more than 150,000 bank branches and exchange bureaux across the world. Visa says that its travellers' cheques can be exchanged in hundreds of thousands of bank branches (all branches with a Visa logo in the window should accept them) and that in a crisis it is also worth asking traders who accepts Visa cards if they will cash Visa travellers' cheques. Thomas Cook claims that its cheques are accepted in more countries than its rivals, and that millions of retailers and bank branches will take them.

These three travellers' cheque issuers dominate the market. A few years ago several of the banks issued their own brand of travellers' cheque, but virtually all now act as agents of the main issuers instead. Barclays, for example, issued its own travellers' cheques until 1994, but is now an agent for Visa. One welcome result of the industry's rationalisation is that the brands are stronger and more widely accepted.

Jeremy Atiyah, travel editor of the Independent on Sunday, says that he has few problems with travellers' cheques wherever he goes. "Even in obscure places in China I found Thomas Cook travellers' cheques were accepted," he says.

"There are some banks that won't accept travellers' cheques but the next bank down the road will."

Careful consideration should be given to which currency to

have travellers' cheques denominated in. Sterling is accepted in most places, but in some countries it will be easier to convert American dollars or German marks. But the disadvantage of holding money in a third- party currency is that you stand to end up paying two sets of currency conversion fees (once when you buy the cheques, once when you cash them into the local currency).

It is not possible to have travellers' cheques in more obscure currencies. Visa, for instance, only offers cheques in 14 currencies.

Paper travellers' cheques may eventually be a thing of the past, however. American Express and Visa, in association with Thomas Cook, have started pilot schemes using travel money cards. These load a pre-paid value onto a specially issued plastic card, for cash to be down-loaded from compatible cash machines. This gives extra security through the use of a PIN number and means that currency conversion charges are only payable when money is withdrawn from the card. Until then, the money is held in sterling on the card.

Travel money cards will probably become a normal method of carrying money abroad eventually. But until cash machine networks are made even more international the more adventurous wanderer will be best-advised to stick with travellers' cheques.

q Advice lines: American Express 01222 666111; Thomas Cook 0800 622101; Visa 0800 515884.