How Economics Helps You Save Money When Traveling Internationally

The number of international travelers is soaring. Many travelers need different currency as they arrive in new countries.  In the past, travelers using an ATM, credit or debit card were simply charged for purchases and withdrawals in whatever currency the locals used.  For example, U.S. travelers to France were charged in Euros when they used their credit card in Paris.

Recently, instead of being simply charged in the local currency many travelers are being asked if they want to pay in their home currency.  Companies offering the service call it “dynamic currency conversion.”  For example, some U.S. travelers to France are now asked if they want to complete transactions in dollars.

The change is occurring because ATMs and credit card terminals now have the ability to check where a card was issued.  Then international travelers can be asked whether they want to use their home currency for their transactions.  The question seems innocuous, but agreeing to use your home currency in a foreign land can inflate the cost of every purchase. Continue reading

How Trump’s nominee for the Fed could turn central banking on its head

President Donald Trump on July 10 nominated Randal Quarles to be one of the seven governors of the Federal Reserve System, the central bank of the United States.

Before I get to Quarles and his qualifications, it’s important to understand the Fed and what it does. Its decisions are vital to every person on the planet who borrows or lends money (pretty much everybody) since it has enormous influence over global interest rates. Its board of governors also influences most other aspects of the global financial system, from regulating banks to how money is wired around the world. Continue reading