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updated 3/25/2011 12:26:05 PM ET 2011-03-25T16:26:05

Do you still use travelers' checks? They work like dollars, but can be replaced if lost or stolen. They're best for those who don't want to use credit or ATM cards — or carry large amounts of cash.

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At your destination, you have to swap each check for local currency. You'll be charged fees of up to $9 to do that. That's not convenient, as we reported in our recent story, "What Your Bank Won't Tell You About Currency Conversion."

The best time to use travelers' checks is if you're visiting China. As we reported:

In China, traveler's checks are an excellent value. Fees are low, and the exchange rate is regulated by the Chinese government, making this one of the safest and most inexpensive ways to exchange U.S. dollars for yuan (especially in more rural locations, which are less likely to have ATMs).

But elsewhere, travelers' checks are becoming outmoded. Many stores and hotels in Europe now refuse to accept them, even if they're denominated in euros. You now have to go to a bank yourself to pay the fees for cash. In the United Kingdom, a major government oversight would like to ban all paper checks by 2018.

American Express is the major seller of travelers' checks and says its business is healthy. But its main rival in the market, Travelex, stopped selling checks four years ago.

If security is the main issue, wearing a security pouch is the best measure — whether you use travelers' checks or not. It’s the most important item on your packing list, besides any medicine you might need. A great value security pouch is the Rick Steves Silk Money Belt (from $10, Amazon.com). It’s lightweight, fits around all sorts of body types comfortably, and has a moisture-protection pocket.

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Copyright © 2012 Newsweek Budget Travel, Inc.

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