I'm always confounded by currency rates applied, particularly to traveler's checks. One never knows whether they will be exchanged at par value, at a premium or discounted. In some cases, Latin American countries that have had problems with counterfeit U.S. currency have exchanged traveler's checks at a higher rate than dollars because they carried a lower risk of being counterfeit.
Last week in Argentina I found that exchanging traveler's checks at any major bank carried a $6 fee, regardless of the amount of the transaction. In Chile, traveler's checks carry the same exchange rate as dollars at the Central Bank.
Travelers headed for Latin America should inquire about exchange practices for dollars and traveler's checks before deciding on the form of currency to take.