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If a credit card machine asks you if you want to pay in your home currency, just say no. an ATM or credit card terminal asks if you want your debit card charges a fee, in most cases it to pay for something in the currency you use as still makes sense to use the local currency. your unit of account, your brain says yes. An exception to this rule, of course, is if your Money also acts as a store of value. Items used bank or credit card charges a very high fixed as money provide the ability to make purchases foreign exchange fee and you need only a little now and also in the future. At the end of a trip, bit of money. If this is your case, then saying yes travelers not planning on returning to a country might save you money even if you get a poor tend to spend leftover money in airports buying exchange rate. things they don’t really want. They don’t want to hold onto foreign bills since they are not a store The main thing is: think it through! Resist your of value. For the same reason, they prefer to be natural inclination to say yes just because it charged in their home currency when getting makes you feel comfortable. Don’t be fooled money from an ATM. when asked if you want to complete a transaction using your home currency. Using the local Money is also a medium of exchange, which is currency can save you money, making your next anything readily acceptable as payment to buy trip abroad less costly. or sell goods and services. This is why people have to convert money when they travel abroad. In New York City, a dollar bill is a medium of exchange for food, drink or a ride on the subway. However, those dollars are not a medium of TMM exchange in, say, China, where waving a wad of greenbacks would mostly get you stares. And that’s why travelers must convert money from one currency to another.

a T H E M I L L M AG A Z I N E

HOW TO SAVE MONEY ABROAD When faced with an ATM or credit card machine that asks if you want to convert to your home currency, I recommend you decline, especially if you went to the pain and effort to ensure you have a card or bank with no extra foreign exchange fees. Even if you don’t have one, and

Jay L. Zagorsky is a senior lecturer at Boston University Questrom School of Business. From 1995 to 2018 Jay held the position of Research Scientist at The Ohio State University, where he collected data as part of the National Longitudinal Surveys on income, wealth, and life experiences of thousands of Americans. His personal finance research has been widely quoted in the media and has been highlighted in the Wall Street Journal, USA Today, Fox News, Good Morning America, Scientific American, and numerous other news outlets. This article was originally published on The Conversation.

Bali, Indonesia photographed by Oleksandr Pidvalnyi [@o_pidvalnyi].

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