In today’s world, it’s hardly ever worth it to carry traveler’s checks. You can find ATM machines in many destinations, even those considered "off the beaten track" where you can get cash, in local currency, using your own credit or debit card.
Typically, the exchange rates charged by your credit card company or bank will be better than those charged by local banks, and the convenience goes without saying. You get money as you need it, without having to carry around lots of bills, and without having to pay commissions and fees to cash the traveler’s checks.
If you simply can’t imagine taking a trip abroad without traveler’s checks, by all means get the ones that are free. If you belong to AAA, or your bank offers free traveler’s checks to their depositors, get them. But make sure you get them in small denominations. Typically, you pay fees based on the amount you’re changing. If you’re like me, you’ll bring them home with you again to redeposit into your own checking account. That is, of course, if you have anything left!
When I travel abroad, I usually bring about $300 in cash so I can quickly convert some dollars to local currency on arrival. That gives me time to find out where the ATM machines are located, without having to stress about not having money in local currency.
I also carry enough $1 bills to take care of incidental tipping, too. Having $20 to $30 in single dollars buys me time to figure out what a good tip should be in local currency (and I can assure you that tips paid in dollars won’t be refused).
I use the hotel in-room safe to store extra cash, so I don’t need to walk around carrying a bundle of bills in my purse. I also take two different credit cards with ATM capabilities, but I only carry one at a time. I leave the second card tucked away in the room safe. If I ever lose my purse or if it gets stolen, I have another card on hand.
And remember, before you even depart the U.S., it’s a good idea to call your card companies and bank to let them know when and where you’re going. The last thing you want is to have your bank account frozen while you’re abroad.
I always call my card company before leaving for any trip. The trip details go into my credit card file. If you’ve ever been in another country, tried to make a purchase, and had your card declined, you know why the preemptive call is important. In today’s security-conscious world, where identity and card theft is rampant, cards are often declined because the charge doesn’t fit a normal profile. If your credit card profile is annotated with your travel details, you’ll never face this embarrassing inconvenience.